0001493152-22-006990 | 10-K | XBRL Viewer

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 14,406	$ 21,295
Accounts receivable, net	5,471	48
Inventories	550	1,242
Prepaid expenses and other current assets	3,177	2,116
Total current assets	23,604	24,701
Property and equipment, net	115	811
Intangible assets, net	3,621	575
Operating lease right-of-use assets, net	104	192
Other long-term assets, net	21	40
Total assets	27,465	26,319
Current liabilities:
Accounts payable	1,774	2,344
PPP loan, current portion		280
Current portion of long-term debt	1,418
Accrued liabilities	1,366	1,170
Total current liabilities	4,558	3,794
Long-term debt, net of discount and including accrued fees	5,262	6,532
Long-term portion of PPP and EIDL loans		231
Operating lease liabilities, net of current portion	15	99
Total liabilities	9,835	10,656
Stockholders’ equity
Common stock, $0.001 par value; 50,000,000 shares authorized; 24,626,004 and 24,312,808 shares issued and outstanding at December 31, 2021 and 2020, respectively	25	24
Additional paid-in capital	111,718	107,797
Accumulated deficit	(94,113)	(92,158)
Total stockholders’ equity	17,630	15,663
Total liabilities and stockholders’ equity	$ 27,465	$ 26,319

Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	24,626,004	24,312,808
Common stock, shares outstanding	24,626,004	24,312,808

Statements of Operations - USD ($) $ in Thousands	12 Months Ended
Statements of Operations - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total net revenues	$ 21,832	$ 39	$ 959
Cost of Sales:
Total cost of sales	2,623	286	453
Gross profit (loss)	19,209	(247)	506
Operating expenses:
Research and development	6,235	14,104	11,555
General and administrative	14,469	12,760	7,552
Total operating expenses	20,704	26,864	19,107
Loss from operations	(1,495)	(27,111)	(18,601)
Other income (expense):
Interest and other income (expense), net	(1,006)	(859)	281
Gain on PPP loan forgiveness	365
Gain on equipment sale	181
Loss before income tax expense	(1,955)	(27,970)	(18,320)
Income tax expense
Net loss	$ (1,955)	$ (27,970)	$ (18,320)
Net loss per share, basic and diluted	$ (0.08)	$ (1.33)	$ (1.03)
Weighted average number of common shares outstanding, basic and diluted	25,207,299	21,010,058	17,760,761
Licensing Revenue [Member]
Revenues:
Total net revenues	$ 19,000		$ 500
Cost of Sales:
Total cost of sales	1,500
Product [Member]
Revenues:
Total net revenues	2,832	39	459
Cost of Sales:
Total cost of sales	$ 1,123	$ 286	$ 453

Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2018	$ 18	$ 72,153	$ (45,868)	$ 26,303
Balance, shares at Dec. 31, 2018	17,607,928
Stock-based compensation		1,888		1,888
Stock-based compensation, shares
Stock option exercises		214		214
Stock option exercises, shares	167,622
Employee stock purchase plan		239		239
Employee stock purchase plan, shares	44,885
Stock warrant exercises
Stock warrant exercises, shares	57,051
Relative fair value of warrants to purchase common stock issued in connection with debt		226		226
Net loss			(18,320)	(18,320)
Ending balance, value at Dec. 31, 2019	$ 18	74,720	(64,188)	10,550
Balance, shares at Dec. 31, 2019	17,877,486
Stock-based compensation		2,576		2,576
Stock-based compensation, shares	15,190
Stock option exercises		255		255
Stock option exercises, shares	194,878
Proceeds from sales of common stock, net of offering costs	$ 6	28,776		28,782
Proceeds from sales of common stock, net of offering costs, shares	5,820,000
Issuance of common stock for product candidate licensing rights		1,264		1,264
Issuance of common stock for product candidate licensing rights, shares	379,474
Employee stock purchase plan		112		112
Employee stock purchase plan, shares	25,780
Relative fair value of warrants to purchase common stock issued in connection with debt		94		94
Net loss			(27,970)	(27,970)
Ending balance, value at Dec. 31, 2020	$ 24	107,797	(92,158)	15,663
Balance, shares at Dec. 31, 2020	24,312,808
Stock-based compensation		3,381		3,381
Stock-based compensation, shares
Stock option exercises	$ 1	338		339
Stock option exercises, shares	144,233
Proceeds from sales of common stock, net of offering costs, shares	94,808
Common stock issued related to restricted stock units
Common stock issued related to restricted stock units, shares	25,000
Employee stock purchase plan		202		202
Employee stock purchase plan, shares	49,155
Stock warrant exercises
Stock warrant exercises, shares	94,808
Relative fair value of warrants to purchase common stock issued in connection with debt
Net loss			(1,955)	(1,955)
Ending balance, value at Dec. 31, 2021	$ 25	$ 111,718	$ (94,113)	$ 17,630
Balance, shares at Dec. 31, 2021	24,626,004

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net loss	$ (1,955)	$ (27,970)	$ (18,320)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	3,381	2,576	1,888
Common stock issued for product candidate licensing rights		1,264
Depreciation and amortization	462	651	447
Debt discount amortization	148	121	16
Gain on forgiveness of PPP loan	(365)
Gain on sale of equipment	(181)
Changes in operating assets and liabilities:
Accounts receivable	(5,423)	425	(473)
Inventories	692	(862)	(380)
Prepaid expenses and other assets	(1,026)	(20)	(1,361)
Accounts payable	(570)	1,769	(377)
Accrued liabilities	116	(300)	534
Net cash used in operating activities	(4,721)	(22,346)	(18,026)
Cash used in investing activities
Proceeds from sale of equipment	700
Purchases of property and equipment	(9)	(50)	(1,096)
Purchase of product licensing rights	(3,250)		(750)
Net cash used in investing activities	(2,559)	(50)	(1,846)
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of issuance costs		1,965	4,750
Proceeds from sales of common stock, net of offering costs		28,782
Proceeds from PPP and EIDL loans		511
EIDL loan payoff	(150)
Proceeds from employee stock purchase plan and stock option exercises	541	367	453
Net cash provided by financing activities	391	31,625	5,203
Change in cash and cash equivalents	(6,889)	9,229	(14,669)
Cash and cash equivalents at beginning of year	21,295	12,066	26,735
Cash and cash equivalents at end of year	14,406	21,295	12,066
Supplemental disclosures of cash flow information
Cash paid for interest	815	797
Cash paid for income taxes
Supplemental disclosures of non-cash investing and financing activities:
Relative fair value of common stock warrants issued in connection with debt		94	226
Right-of-use assets obtained in exchange for lease liabilities		$ 195

Company Overview

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Company Overview

Note 1 — Company Overview

Eton Pharmaceuticals, Inc. (“Eton” or the “Company”) was incorporated as a Delaware “C” corporation on April 27, 2017 and was initially set up as a wholly-owned subsidiary of Harrow Health, Inc. (“Harrow”, fka Imprimis Pharmaceuticals, Inc.). In June 2017, the Company raised $20,055 in start-up capital through a private sale of preferred stock and a separate management team was then established for Eton with its corporate offices located in Deer Park, Illinois. In November 2018, the Company completed an initial public offering (the “IPO”) and received net proceeds of $21,960, after deducting underwriting discounts and commissions and offering-related expenses. In November 2019, the Company entered into a credit agreement and received net proceeds of $4,750 and in August 2020 the Company received net proceeds of $1,965 under the credit agreement (see Note 5). In March and April 2020, Eton received net proceeds of $7,756 from the sale of shares of its common stock and in October 2020, the Company received net proceeds of $21,026 from a public offering for its shares at an offering price of $7.00 per share (see Note 6).

Eton is a specialty pharmaceutical company focused on developing, acquiring, and commercializing innovative products. Eton is primarily focused on hospital injectable and rare disease products. The Company seeks to improve the formula, delivery system, or safety of existing molecules in order to address unmet patient needs. Eton pursues what it perceives to be low-risk product candidates where existing published literature, historical clinical trials, or physician usage has established safety and/or efficacy of the molecule, thereby reducing the incremental clinical burden required for the Company to bring the product to patients.

The Company’s Biorphen® product was approved by the FDA in October 2019 and sales commenced for this product at the end of 2019. Eton’s EM-100 product was sold to Bausch Health and the product was approved by the FDA in September 2020. Bausch Health launched this product under the name of Alaway® Preservative Free in January 2021 and Eton receives royalties from the sale of the product. The Company acquired the licensing rights to Alkindi Sprinkle and this product was approved by the FDA in October 2020 and launched in December 2020. The Company entered into a co-promotion agreement with Tolmar Pharmaceuticals in November 2021 whereby Tolmar will promote Alkindi Sprinkle through its 60+ person salesforce in exchange for a royalty on net sales. In addition, the Company launched Carglumic Acid tablets in December 2021 as the first and only FDA-approved generic version of Carbaglu®.

Liquidity Considerations

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity Considerations

Note 2 — Liquidity Considerations

As of December 31, 2021, the Company had an accumulated deficit of $94,113 and for the year ended December 31, 2021 the Company used net cash in operating activities of $4,721.

To date, the Company has generated revenues from six products and expects further growth in 2022 and beyond in accordance with additional market penetration from these products plus revenues from licensing and additional products where it anticipates FDA approval. The Company currently believes its existing cash and cash equivalents of $14,406 as of December 31, 2021 augmented by the $5,000 milestone payment received in January 2022 for the commercial launch of EPRONTIA™ (Topiramate oral solution) by Azurity Pharmaceuticals (“Azurity”), will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months from the date of issuance of these financial statements. This estimate is based on the Company’s current assumptions, including assumptions relating to estimated sales and its ability to manage its spending. The Company could use its available capital resources sooner than currently expected. Accordingly, the Company could seek to obtain additional capital through equity financings, the issuance of debt or other arrangements. However, there can be no assurance that the Company will be able to raise additional capital if needed or under acceptable terms, if at all. The sale of additional equity may dilute existing stockholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. The Company’s existing long-term debt obligation contains covenants and limits the Company’s ability to pay dividends or make other distributions to stockholders. If the Company experiences delays in product sales growth and completing its product development and obtaining regulatory approval for its other product candidates and is unable to obtain such additional financing, operations would need to be scaled back or discontinued.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3 — Summary of Significant Accounting Policies

Basis of Presentation

The Company has prepared the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, provisions for uncollectible receivables, chargebacks and sales returns, valuation of inventories, useful lives of assets and the impairment of property and equipment, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.

Segment Information

The Company operates the business on the basis of a single reportable segment, which is the business of developing and commercializing prescription drug products. The Company’s chief operating decision-maker is the Chief Executive Officer (“CEO”), who evaluates the Company as a single operating segment.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in U.S. financial institutions or invested in short-term U.S. treasury bills. Cash equivalents consist of an interest-bearing checking account and a U.S. treasury bill. From time to time, amounts deposited with its bank exceed federally insured limits. The Company believes the associated credit risk to be minimal.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and are non-interest bearing. Accounts receivable are recorded net of allowances for doubtful accounts, cash discounts for prompt payment, distribution fees, chargebacks and returns and allowances. The total for these reserves amounted to $96 and $71 as of December 31, 2021 and 2020, respectively.

Inventories

The Company values its inventories at the lower of cost or net realizable value using the first-in, first-out method of valuation. The Company reviews its inventories for potential excess or obsolete issues on an ongoing basis and will record a write-down if an impairment is identified. Inventories at December 31, 2021 and 2020 consist solely of purchased finished goods. At December 31, 2021, inventories are shown net of a slow-moving reserve for its Biorphen product of $1,414 due to the risk of expiry before this entire stock of inventories is sold. There was an inventory reserve of $1,414 and $623 at December 31, 2021 and 2020, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment is computed utilizing the straight-line method based on the following estimated useful lives. Computer hardware and software is depreciated over three years. Equipment, furniture and fixtures is depreciated over five years. Leasehold improvements are amortized over their estimated useful lives or the remaining lease term, whichever is shorter. Construction in progress is capitalized but not depreciated until it is placed into service.

Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Intangible Assets

The Company capitalizes payments it makes for licensed products when the payment is based on FDA approval for the product and the cost is recoverable based on expected future cash flows from the product. The cost is amortized on a straight-line basis over the estimated useful life of the product commencing on the approval date in accordance with Accounting Standards Codification (“ASC”) 350 — Intangibles - Goodwill and Other. A $750 payment related to the approval of the Company’s Biorphen product in 2019 has been capitalized and that cost is being amortized over five years. A $3,250 payment related to the approval of the Company’s Carglumic Acid product in December 2021 has been capitalized and that cost is being amortized over ten years. The intangible assets, net on the Company’s balance sheet reflected $379 and $175 of accumulated amortization as of December 31, 2021 and 2020, respectively. The Company recorded amortization expense of $204, $150 and $25 for the years ended December 31, 2021, 2020 and 2019, respectively, and will record amortization expense of $475 per year for these intangible assets for 2022 through 2023 and then $450 in 2024 when the Biorphen asset will be fully amortized. For 2025 through 2030, the Company will incur amortization expense of $325 and then $271 in 2031 when the Carglumic Acid asset will be fully amortized.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the Company’s statements of operations for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairment was recognized during the years ended December 31, 2021, 2020 and 2019.

Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants

Costs incurred to issue debt are deferred and recorded as a reduction to the debt balance in the accompanying balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and accreted over the expected term of the debt to interest expense using the effective interest method.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Leases

The Company accounts for leases in accordance with ASC Topic 842 — Leases. The Company reviews all relevant facts and circumstances of a contract to determine if it is a lease whereby the terms of the agreement convey the right to control the direct use and receive substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration. The associated right-of-use assets and lease liabilities are recognized at lease commencement. The Company measures lease liabilities based on the present value of the lease payments over the lease term discounted using the rate it would pay on a loan with the equivalent payments and term for the lease. The Company does not include the impact for lease term options that would extend or terminate the lease unless it is reasonably certain that it will exercise any such options. The Company accounts for the lease components separately from non-lease components for its operating leases.

The Company measures right-of-use assets based on the corresponding lease liabilities adjusted for (i) any prepayments made to the lessor at or before the commencement date, (ii) initial direct costs it incurs, and (iii) any incentives under the lease. In addition, the Company evaluates the recoverability of its right-of-use assets for possible impairment in accordance with its long-lived assets policy.

Operating leases are reflected on the balance sheets as operating lease right-of-use assets, current accrued liabilities and long-term operating lease liabilities. The Company does not have any finance leases as of December 31, 2021 and 2020.

The Company commences recognizing operating lease expense when the lessor makes the underlying asset available for use by the Company and the operating lease expense is recognized on a straight-line basis. Variable lease payments are expensed as incurred.

The Company does not recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less; such lease costs are recorded in the statements of operations on a straight-line basis over the lease term.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the successful award of a patent and the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.

Concentrations of Credit Risk, Sources of Supply and Significant Customers

The Company is subject to credit risk for its cash and cash equivalents which are invested in money market funds and U.S. treasury bills from time to time. The Company maintains its cash and cash equivalent balances with one major commercial bank and the deposits held with the financial institution exceed the amount of insurance provided on such deposits and is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents to the extent recorded on the balance sheets.

The Company is dependent on third-party suppliers for its products and product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of suppliers to manufacture key chemicals, approved products and process its product candidates as part of its development programs. These programs could be adversely affected by a significant interruption in the manufacturing process.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

The Company is also subject to credit risk from its accounts receivable related to product sales as it extends credit based on an evaluation of the customer’s financial condition, and collateral is not required. Management monitors its exposure to accounts receivable by periodically evaluating the collectability of the account receivable based on a variety of factors including the length of time the receivables are past due, the financial health of the customer and historical experience. Based upon the review of these factors, the Company recorded no allowance for doubtful accounts at December 31, 2021 or 2020. The accounts receivable balance at December 31, 2021 and 2020 and product sales revenue recognized during the year ended December 31, 2021 and 2020 consist of sales to and amounts due from AmerisourceBergen Corporation, Cardinal Health Services and McKesson Corporation for sales of the Company’s Biorphen product. The December 31, 2021 accounts receivable balance and sales in 2021 also include a $5,000 milestone from Azurity, in accordance with the Eprontia™ (topiramate oral solution) product, amounts due from AnovoRx for sales of the Company’s Alkindi Sprinkle product and its Carglumic Acid product, which launched in December 2021.

Revenue Recognition for Contracts with Customers

The Company accounts for contracts with its customers in accordance with ASC 606 — Revenue from Contracts with Customers. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses whether these options provide a material right to the customer and, if so, they are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes.

The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method. Any amounts received prior to revenue recognition will be recorded as deferred revenue. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date will be classified as current portion of deferred revenue in the Company’s balance sheets. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as long-term deferred revenue, net of current portion.

Milestone Payments – If a commercial contract arrangement includes development and regulatory milestone payments, the Company will evaluate whether the milestone conditions have been achieved and if it is probable that a significant revenue reversal would not occur before recognizing the associated revenue. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Significant Financing Component – In determining the transaction price, the Company will adjust consideration for the effects of the time value of money if the expected period between payment by the licensees and the transfer of the promised goods or services to the licensees will be more than one year.

The Company sells Biorphen in the U.S. to wholesale pharmaceutical distributors, who then sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual shipments of Biorphen represent performance obligations under each purchase order. The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities. The Company has no significant obligations to wholesalers to generate pull-through sales. In addition, the Company sells its Alkindi Sprinkle and Carglumic Acid product to one pharmacy distributor customer which provides order fulfilment and inventory storage/distribution services.

Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when the wholesalers sell Biorphen at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. In addition, the Company pays fees to wholesalers for their distribution services, inventory reporting and chargeback processing. The Company pays GPOs fees for administrative services and for access to GPO members and concluded the benefits received in exchange for these fees are not distinct from its sales of Biorphen, and accordingly it applies these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Biorphen and the Company’s lengthy return period, there may be a significant period of time between when the product is shipped and when it issues credits on returned product. For its Alkindi Sprinkle and Carglumic Acid products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment.

The Company estimates the transaction price when it receives each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler/distributor arising from all of the above factors. The Company has developed estimates for future returns and chargebacks of Biorphen and the impact of the other discounts and fees it pays while Alkindi Sprinkle and Carglumic Acid sales to its distributor are not subject to returns. When estimating these adjustments to the transaction price, the Company reduces it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known.

The Company recognizes revenue from Biorphen product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay the Company. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, the Company does not believe they have a significant incentive to return the product. The Company stores its Alkindi Sprinkle and Carglumic Acid inventory at its pharmacy distributor customer location and sales are recorded when stock is pulled and shipped to fulfill specific patient orders.

Upon recognition of revenue from product sales, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, state Medicaid and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. The Company monitors actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts end up differing from its estimates, it will make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment.

In addition, the Company anticipates it will receive revenues from product licensing agreements where it has contracted for milestone payments and royalties from products it has developed or for which it has acquired the rights to a product developed by a third party.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Cost of Product Sales

Cost of product sales consists of the profit-sharing and royalty fees with the Company’s product licensing and development partners, the purchase costs for finished products from third-party manufacturers and freight and handling/storage costs from the Company’s 3PL logistics service providers. The cost of sales for profit-sharing and royalty fees and costs for purchased finished products and the associated inbound freight expense is recorded when the associated product sale revenue is recognized in accordance with the terms of shipment to customers while outbound freight and handling/storage fees charged by the 3PL service provider are expensed as they are incurred. Cost of sales also reflects any write-downs or reserve adjustments for the Company’s inventories.

Research and Development Expenses

Research and development (“R&D”) expenses include both internal R&D activities and external contracted services. Internal R&D activity expenses include salaries, benefits and stock-based compensation and other costs to support the Company’s R&D operations. External contracted services include product development efforts such as certain product licensor milestone payments, clinical trial activities, manufacturing and control-related activities and regulatory costs. R&D expenses are charged to operations as incurred. The Company reviews and accrues R&D expenses based on services performed and relies upon estimates of those costs applicable to the stage of completion of each project. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

Upfront payments and milestone payments made for the licensing of technology for products that are not yet approved by the FDA are expensed as R&D in the period in which they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and are expensed as the related goods are delivered or the services are performed.

Earnings (Loss) Per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as Series A Preferred, unvested restricted stock, stock options and warrants that are outstanding during the period. Common stock equivalents are excluded from the computation when their inclusion would be anti-dilutive. No such adjustments were made for 2021, 2020 or 2019 as the Company reported a net loss for the years ended December 31, 2021, 2020 and 2019 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 9). Basic weighted average shares for the year ended December 31, 2021 include 600,000 vested warrants to purchase common shares. As the shares underlying these warrants can be purchased for little to no consideration ($0.01 per share exercise price), they are included in the computation of basic earnings per share.

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of ASC — 718 Compensation — Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards. The Company estimates the fair value of stock-based option awards using the Black-Scholes-Merton option-pricing model (“BSM”). The BSM requires the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate was determined from the implied yields for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options or warrants. Dividends on common stock are assumed to be zero for the BSM valuation of the stock options. The expected term of stock options granted is based on vesting periods and the contractual life of the options. Expected volatilities are based on comparable companies’ historical volatility along with a limited weighting included for the Company’s own volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current conditions. The Company accounts for forfeitures as they occur. The Company uses the closing common stock price on the date of grant for the fair value of the common stock.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Income Taxes

As part of the process of preparing the Company’s financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease to this allowance in a period, the impact will be included in income tax expense in the statements of operations. As of December 31, 2021 and 2020, the Company has established a 100% valuation reserve against its deferred tax assets.

The Company accounts for income taxes under the provisions of ASC 740 - Income Taxes. As of December 31, 2021 and 2020, there were no unrecognized tax benefits included in the balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its balance sheets at December 31, 2021 or 2020, and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the Company is subject to taxation in the United States and certain individual states – primarily Illinois and Tennessee. The Company’s tax losses from 2017 through 2021 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses (“NOLs”).

Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result, no liability for uncertain tax positions was recorded as of December 31, 2021 or 2020.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 3 — Summary of Significant Accounting Policies (continued)

Fair Value Measurements

We measure certain of our assets and liabilities at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value accounting requires characterization of the inputs used to measure fair value into a three-level fair value hierarchy as follows:

Level 1 — Inputs based on quoted prices in active markets for identical assets or liabilities. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Observable inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent from the entity.

Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available.

Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for the Company’s financials, assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

The Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, PPP loan and long-term debt obligation. The carrying amounts of these financial instruments, except for the PPP loan and long-term debt obligation, approximate their fair values due to the short-term maturities of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the PPP loan and long-term debt obligation approximate their respective fair values.

Impact of New Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the current period that would apply to the Company and have a material impact on its financial position or results of operations.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Property and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 4 – Property and Equipment

Property and equipment consist of the following:

Schedule of Property and Equipment

	December 31, 2021			December 31, 2020
Computer hardware and software	$	157		$	182
Furniture and fixtures		106			143
Equipment		132			994
Leasehold improvements		71			184
Construction in progress		—			—
Property and equipment, gross		466			1,503
Less: accumulated depreciation and amortization		(351	)		(692	)
Property and equipment, net	$	115		$	811

Depreciation and amortization expense for the years ended December 31, 2021, 2020 and 2019 was $155, $347 and $283, respectively. The balances at December 31, 2021 reflect the sale of laboratory equipment in May 2021 which had a net book value of $519.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 5 – Debt

SWK Loan

On November 13, 2019, the Company entered into a credit agreement (the “SWK Credit Agreement”) with SWK Holdings Corporation (“SWK”) which provided for up to $10,000 in financing. The Company received proceeds of $5,000 at closing and was able to borrow an additional $5,000 upon the FDA approval of a second product developed by the Company, excluding EM-100. In March 2020, in conjunction with the Company’s Alkindi Sprinkle product licensing agreement (see Note 14) and the Company’s March 2020 sale of additional shares of its common stock (see Note 6), the Company and SWK amended the SWK Credit Agreement. The amendment provided the Company with the option to immediately draw $2,000 and the ability to borrow an additional $3,000 based upon the FDA approval of EM-100 and Alkindi Sprinkle which subsequently occurred in September 2020. Accordingly, the Company borrowed an additional $2,000 on August 11, 2020. The term of the SWK Credit Agreement is for five years and borrowings bear interest at a rate of LIBOR 3-month plus 10.0%, subject to a stated LIBOR floor rate of 2.0%. A 2.0% unused credit limit fee is assessed during the first twelve months after the date of the SWK Credit Agreement and loan fees include a 5.0% exit fee based on the principal amounts drawn which is payable at the end of the term of the SWK Credit Agreement. The Company is required to maintain a minimum cash balance of $3,000, only pay interest on the debt until February 2022 and then pay 5.5% of the loan principal balance commencing on February 15, 2022 and then every three months thereafter until November 13, 2024 at which time the remaining principal balance is due. Borrowings under the SWK Credit Agreement are secured by the Company’s assets. The SWK Credit Agreement contains customary default provisions and covenants which include limits on additional indebtedness. In March 2020, SWK provided a waiver for the Company to obtain loans with the Small Business Association. In February 2021, the Company notified SWK that it will not require additional borrowing capacity under the SWK Credit Agreement and terminated the additional borrowing capacity with SWK.

In connection with the initial $5,000 borrowed in November 2019, the Company issued warrants to SWK to purchase 51,239 shares of the Company’s common stock with an exercise price of $5.86 per share. The relative fair value of these 51,239 warrants was $226 and was estimated using the Black-Scholes-Merton option pricing model with the following assumptions: fair value of the Company’s common stock at issuance of $5.75 per share; seven-year contractual term; 95% volatility; 0% dividend rate; and a risk-free interest rate of 1.8%.

In connection with the additional $2,000 borrowed in August 2020, the Company issued warrants for 18,141 shares of its common stock at an exercise price of $6.62 per share. The relative fair value of the 18,141 warrants was $94 and was estimated using the Black-Scholes-Merton option pricing model with the following assumptions: fair value of the Company’s common stock at issuance of $6.85 per share; seven-year contractual term; 95% volatility; 0% dividend rate; and a risk-free interest rate of 0.4%.

These warrants (the “SWK Warrants”) are exercisable immediately and have a term of seven years from the date of issuance. The SWK Warrants are subject to a cashless exercise feature, with the exercise price and number of shares issuable upon exercise subject to change in connection with stock splits, dividends, reclassifications and other conditions.

The Company recorded interest expense of $1,042, $884 and $98 in 2021, 2020 and 2019, respectively, which included $148 $121 and $16, respectively, of debt discount amortization. The Company had accrued interest of $134 and $48 as of December 31, 2021 and 2020, respectively, which is included in accrued liabilities in the accompanying balance sheets.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 5 – Debt (continued)

The table below reflects the future annual payments for the SWK loan principal and interest as of December 31, 2021.

	Amount
2022	$	2,202
2023		1,756
2024		5,300
Total payments		9,258
Less: amount representing interest		(2,258	)
Loan payable, gross		7,000
Less: current portion of long-term debt		(1,418	)
Less: unamortized discount		(320	)
Long-term debt, net of unamortized discount	$	5,262

PPP loan

On May 4, 2020, the Company received $361 in loan proceeds under the Paycheck Protection Program (“PPP”) from the Small Business Administration (“SBA”) through its banking relationship with Bank of America. On May 20, 2021, the Company received notice that the loan principal and cumulative interest of $4 was forgiven in full as permitted under the applicable SBA guidelines for PPP loans. The $365 gain on debt extinguishment is reflected in non-operating income for the year ended December 31, 2021.

EIDL loan

On July 21, 2020, the Company received $150 in loan proceeds under the Economic Injury Disaster Loan program (“EIDL”) from the SBA. The Company paid off the full EIDL loan principal and its cumulative interest of $6 in July 2021.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Common Stock

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Common Stock

Note 6 — Common Stock

The Company has 50,000,000 authorized shares of $0.001 par value common stock as per its Amended and Restated Certificate of Incorporation.

In March and April 2020, the Company entered into securities purchase agreements with various investors and sold an aggregate of 2,600,000 shares of its common stock at a price of $3.00 per share and received $7,756 in net proceeds after deducting issuance costs associated with the sale.

In March 2020, the Company issued 379,474 shares of its common stock to Diurnal Limited (“Diurnal”) as a milestone fee for acquiring the U.S. marketing rights to Alkindi Sprinkle®, an orphan drug product currently under review with the FDA (see Note 14). The shares were valued at $1,264 based on the Company’s closing stock price on the date of issuance and this amount was recorded as a component of the Company’s research and development expense and a corresponding increase to its additional paid-in-capital.

In October 2020, the Company issued 3,220,000 shares of its common stock in a public offering at an offering price of $7.00 per share and received net proceeds of $21,026.

For the years ended December 31, 2021 and 2020, the Company issued 144,233 and 194,878 shares, respectively, of its common stock resulting from stock option exercises under its 2018 Equity Incentive Plan (see Note 8). For the years ended December 31, 2021 and 2020, the Company issued 49,155 and 25,780 shares, respectively, under the Company’s Employee Stock Purchase Program (“ESPP”). In April 2020, the Company issued 15,190 shares of its common stock as an RSA to a new employee. This RSA vested 25% every three months and was 100% vested in April 2021. In April 2021, the Company issued 25,000 shares of its common stock to a member of its board of directors upon his retirement from the board in connection with previously vested restricted stock units (“RSUs”). During 2021, there were 135,650 warrants exercised (all on a cashless basis) resulting in 94,808 shares of common stock being issued by the Company.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI http://asc.fasb.org/topic&trid=2208762

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Common Stock Warrants

12 Months Ended

Dec. 31, 2021

Common Stock Warrants

Common Stock Warrants

Note 7 — Common Stock Warrants

Listed below is a summary of warrants outstanding as of December 31, 2021:

Summary of Warrants Outstanding

Description of Warrants	No. of Shares		Exercise Price
Business Advisory Warrants – 2017		600,000	$	0.01
Placement Agent Warrants – 2017 Preferred Stock Offering		471,446	$	3.00
Placement Agent Warrants - IPO		414,000	$	7.50
SWK Warrants – Debt (Tranche #1)		51,239	$	5.86
SWK Warrants – Debt (Tranche #2)		18,141	$	6.62
Total		1,554,826	$	3.18 (Avg)

The holders of these warrants or their permitted transferees, are entitled to rights with respect to the registration under the Securities Act of their shares that are converted to common stock, including demand registration rights and piggyback registration rights. These rights are provided under the terms of a registration rights agreement between the Company and the investors.

A rollforward of the warrants outstanding is listed in the table below:

	No. of Shares
Balance as of the beginning of the year		1,690,476
Exercise of Placement Agent Warrants – 2017 Preferred Stock Offering		(135,650	)
Balance as of the end of the year		1,554,826

There were 135,650 warrants exercised (all on a cashless basis) in 2021 resulting in 94,808 shares of common stock being issued by the Company. There were no warrant exercises is 2020. The intrinsic value of the warrants exercised in 2021 was $806.

Share-Based Payment Awards

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Payment Awards

Note 8 — Share-Based Payment Awards

The Company’s board of directors and stockholders approved the Eton Pharmaceuticals, Inc. 2017 Equity Incentive Plan in May 2017 (the “2017 Plan”), which authorized the issuance of up to 5,000,000 shares of the Company’s common stock. In conjunction with the Company’s IPO in November 2018, the Company’s stockholders and board of directors approved the 2018 Equity Incentive Plan, as amended (the “2018 Plan”) which succeeded the 2017 Plan. The Company has granted RSAs, stock options and RSUs for its common stock under the 2017 Plan and 2018 Plan as detailed in the tables below. There were 537,306 shares available for future issuance under the 2018 Plan as of December 31, 2021.

Shares that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan. In addition, the 2018 Plan provides that commencing January 1, 2019 and through January 1, 2028, the share reserve will be increased by 4% of the total number of shares outstanding as of the preceding December 31, subject to a reduction at the discretion of the Company’s board of directors. On January 1, 2019, the share reserve was increased by 704,317 shares based on the 17,607,928 shares of common stock outstanding at December 31, 2018. On January 1, 2020, the share reserve was increased by 715,099 shares based on the 17,877,486 shares of common stock outstanding at December 31, 2019. On January 1, 2021, the share reserve was increased by 972,512 shares based on the 24,312,808 shares of common stock outstanding at December 31, 2020. The exercise price for stock options granted is not less than the fair value of common stock as determined by the board of directors as of the date of grant. The Company uses the closing stock price on the date of grant as the exercise price.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 8 — Share-Based Payment Awards (continued)

In April 2020, the Company issued 15,190 shares of its common stock as an RSA to a new employee. This RSA vested 25% every three months and was 100% vested in April 2021.

To date, all stock options issued have been non-qualified stock options and the exercise prices were set at the fair value for the shares at the dates of grant. Options generally have a ten-year life, except for options to purchase 50,000 shares of the Company’s common stock granted to product consultants that expire within five years if the Company is not able to successfully file certain product submissions to the FDA prior to the five-year expiration date. Furthermore, these option awards to the Company’s product consultants do not vest unless certain product submissions are made to the FDA, and accordingly, the Company has not recorded any expense for these contingently vesting option awards to its product consultants.

For the years ended December 31, 2021, 2020, and 2019, the Company’s total stock-based compensation expense was $3,381, $2,576 and $1,888, respectively. Of these amounts, $2,838, $2,295 and $1,574 was recorded in general and administrative expenses, respectively, and $543, $281 and $314 was recorded in R&D expenses, respectively.

A summary of stock option activity is as follows:

Summary of Stock Option Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding as of January 1, 2021		2,824,500		$	4.05		8.3	$	11,525
Issued		1,017,098			8.31
Exercised		(144,233	)		2.35
Forfeited/Cancelled		(183,646	)		6.63
Options outstanding as of December 31, 2021		3,513,719		$	5.22		7.9	$	2,711
Options exercisable at December 31, 2021		2,096,630		$	4.37		7.3	$	2,257
Options vested and expected to vest at December 31, 2021		3,463,719		$	5.27		7.9	$	2,565

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had strike prices lower than the fair value of the Company’s common stock at December 31. The intrinsic value of the options exercised during 2021 was $682.

There were 144,233 shares issued for exercise of stock options during the year ended December 31, 2021 for proceeds of $339.

The assumptions used to calculate the fair value of options granted during the years ended December 31, 2021, 2020, and 2019 under the BSM were as follows:

	December 31, 2021			December 31, 2020			December 31, 2019
Expected dividends		—	%		—	%		—	%
Expected volatility		70-80	%		95	%		90	%
Risk-free interest rate		0.9-1.4	%		0.4-0.7	%		1.9-2.5	%
Expected term		6.0 years			5.9 years			5.9 years
Weighted average fair value	$	5.64		$	3.06		$	5.54

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 8 — Share-Based Payment Awards (continued)

Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options granted to employees and directors, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The expected term of options granted to non-employees equals the contractual life of the options.

Expected Volatility — Due to the Company’s limited operating history and a lack of Company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company has also applied some limited weighting to its own volatility.

Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options.

Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Fair value of Common Stock —The Company uses the closing stock price on the date of grant for the fair value of the common stock.

A summary of activity for RSAs is as follows:

Restricted Stock Awards	Number of shares
Unvested as of January 1, 2021		7,595
Issued		—
Vested		(7,595	)
Forfeited/Cancelled		—
Unvested as of December 31, 2021		—

The grant date fair value per share for the RSA issued in 2020 was $3.95. No RSAs were issued in 2021 or 2019. The fair value of the RSAs vested during the years ended December 31, 2021, 2020 and 2019 was $30, $30 and $66, respectively.

As of December 31, 2021, there was a total of $6,025 of unrecognized compensation costs related to non-vested stock option awards.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 8 — Share-Based Payment Awards (continued)

In December 2018, the Company’s board of directors adopted an initial offering of the Company’s common stock under the Company’s ESPP. The Company’s ESPP provides for an initial reserve of 150,000 shares and this reserve is automatically increased on January 1 of each year by the lesser of 1% of the outstanding common shares at December 31 of the preceding year or 150,000 shares, subject to reduction at the discretion of the Company’s board of directors.

The initial offering began on December 17, 2018 and ended on December 10, 2019. The initial offering consisted of two purchase periods, with the first purchase period ended on June 10, 2019 and the second purchase period ended on December 10, 2019. The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the initial offering period, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration ending on or around June 10 and December 10 each year, subject to a restart feature if the Company’s stock price drops at the end of a six-month period within the twelve-month offering period.

The Company recorded an expense of $73, $71 and $112 in 2021, 2020 and 2019, respectively, related to the ESPP. The weighted average grant date fair value of share awards in 2021, 2020 and 2019 was $2.50, $2.32 and $2.56 per share, respectively. Employees contributed $205 and $115 to the ESPP during 2021 and 2020, respectively. Of these amounts, $22 and $18 at December 31, 2021 and 2020, respectively, is included in accrued liabilities in the accompanying balance sheets.

Basic and Diluted Net Loss per Common Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Basic and Diluted Net Loss per Common Share

Note 9 — Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock and “if converted” method) from stock options, unvested RSAs and RSUs, and warrants at December 31, 2021, 2020 and 2019 were 4,286,687, 3,371,489 and 3,590,465, respectively, and are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive. Included in the basic and diluted net loss per share calculation were RSUs awarded to directors that had vested, but the issuance and delivery of the shares are deferred until the director retires from service as a director.

The following table shows the computation of basic and diluted net loss per common share:

	Year ended December 31, 2021			Year ended December 31, 2020			Year ended December 31, 2019

Net loss	$	(1,955	)	$	(27,970	)	$	(18,320	)
Weighted average common shares outstanding (basic and diluted)		25,207,299			21,010,058			17,760,761
Net loss per common share (basic and diluted)	$	(0.08	)	$	(1.33	)	$	(1.03	)

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions

Note 10 — Related Party Transactions

Harrow

Harrow was issued 3,500,000 shares of the Company’s common stock at the formation of the Company at the $0.001 par value per share price as the paid-in-capital contribution from Harrow. In April 2021, Harrow sold 1,518,000 shares of the Eton common stock it owned in an underwritten public offering. As of December 31, 2021, Harrow owned 1,982,000 shares of Eton’s common shares which represents 8.0% of the Company’s common shares outstanding. The Company and Harrow signed licensing agreements for two products developed by Harrow whereby Harrow assigned the product rights to the Company. In July 2018, the Company determined that one of the products was not viable for its portfolio of product opportunities and cancelled the licensing agreement whereby Harrow retains the product rights.

On May 6, 2019, the Company entered into an Asset Purchase Agreement (the “CT-100 Asset Purchase Agreement”) with Harrow. Pursuant to the CT-100 Asset Purchase Agreement, the Company sold all of its right, title and interest in CT-100 to Harrow, including any such product that incorporates or utilizes its intellectual property rights (a “Product” or, collectively, “Products”). Pursuant to the CT-100 Asset Purchase Agreement, Harrow will make certain payments to the Company upon the achievement of certain development and commercial milestones. In addition, Harrow is required to pay the Company a royalty in the low-single digit percentage range worldwide on a country-by-country basis on net sales for a period of the longer of 15 years from the date of the first commercial sale of a product in a particular country or the time that a valid intellectual property claim on such Product remains in force in the applicable country. The CT-100 Asset Purchase Agreement also contains customary representations, warranties, covenants and indemnities by the parties. To date, there have not been any sales of the CT-100 product and therefore no earned royalties to the Company for this product.

Additionally, the Chief Executive Officer of Harrow was a member of the Company’s board of directors until March 17, 2021 when he retired from service with the board. The Company issued 25,000 shares to the Harrow CEO in April 2021 after his retirement from the Company’s board associated with RSU’s that were previously fully vested.

In late March 2021, the Company closed its laboratory operation in Lake Zurich, Illinois and in May 2021 it reached an agreement for Imprimis Pharmaceuticals, a subsidiary of Harrow, to purchase its lab equipment for $700 which was $181 above the Company’s net book value of the equipment.

Chief Executive Officer

The CEO has a partial interest in a company that the Company has partnered with for its EM-100 product as described below.

The Company acquired the exclusive rights to sell the EM-100 product in the United States pursuant to a sales and marketing agreement (the “Eyemax Agreement”) dated August 11, 2017 between the Company and Eyemax LLC (“Eyemax”), an entity affiliated with the Company’s CEO. The Company also held a right of first refusal to obtain the exclusive license rights for geographic areas outside of the United States. Pursuant to the Eyemax Agreement, the Company was responsible for all costs of testing and FDA approval of the product, other than the FDA filing fee which was paid by Eyemax. The Company was also to be responsible for commercializing the product in the United States at its expense. The Company paid Eyemax $250 upon execution of the Eyemax Agreement, which was recorded as a component of R&D expense. Under the terms of the original agreement, the Company would pay Eyemax $250 upon FDA approval and $500 upon the first commercial sale of the product and pay Eyemax a royalty of 10% on the net sales of all products. The Eyemax Agreement was for an initial term of 10 years from the date of the Eyemax Agreement, subject to successive two-year renewals unless the Company elected to terminate the Eyemax Agreement. There were no amounts due under the terms of the Eyemax Agreement as of December 31, 2021 or 2020.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 10 — Related Party Transactions (continued)

On February 18, 2019, the Company entered into an Amended and Restated Agreement with Eyemax amending the Sales Agreement (the “Amended Agreement”). Pursuant to the Amended Agreement, Eyemax sold the Company all of its right, title and interest in EM-100, including any such product that incorporates or utilizes Eyemax’s intellectual property rights. Under the Amended Agreement, the Company assumed certain liabilities of Eyemax under its Exclusive Development & Supply Agreement with Excelvision SAS dated as of July 11, 2013, as amended (the “Excelvision Agreement”), with respect to certain territories and arising during certain time periods. Pursuant to the Amended Agreement, the Company paid Eyemax two milestone payments: (i) one milestone payment for $250 upon regulatory approval in the territory by the FDA of the first single agent product and (ii) one milestone payment for $500 following the first commercial sale of the first single agent product in the territory. Following payment of the milestones, the Company is entitled to retain all of the non-royalty transaction revenues and royalties up to $2,000 (the “Recovery Amount”). After the Company has retained the full Recovery Amount, it is entitled to retain half of all royalty and non-royalty transaction revenue. The Company has realized $1,735 of the non-royalty and royalty revenue as of December 31, 2021. The Amended Agreement also contains customary representations, warranties, covenants and indemnities by the parties. The EM-100 asset and its associated product rights were sold to Bausch Health on February 18, 2019 and future potential royalties of twelve percent on Bausch Health sales of EM-100, which was approved by the FDA in September 2020, will be split between Eyemax and the Company. The royalty from Bausch Health is subject to reduction if a competitive product with the same active pharmaceutical ingredient is launched in the U.S. or if the EM-100 U.S market share falls below a specified target percentage. There were no amounts due Eyemax under the terms of the Amended Agreement as of December 31, 2021 or 2020.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Leases

12 Months Ended

Dec. 31, 2021

Leases

Leases

Note 11 — Leases

The Company recognizes a right-of-use (“ROU”) asset and a lease liability on the balance sheet for substantially all leases, including operating leases, and separates lease components from non-lease components related to its office space lease.

On January 12, 2018, the Company signed an amended lease agreement to lease additional office space adjacent to its current corporate office space in Deer Park, Illinois. The amended lease was scheduled to expire at the end of March 2021. In October 2020, the Company renewed its office lease for a two-year period through March 31, 2023 and recorded $195 in ROU assets and $195 in operating lease liabilities associate with the lease extension. On March 7, 2018, the Company entered into a lease for laboratory space at a complex in Lake Zurich, Illinois. The lease commenced on March 7, 2018 and was scheduled to expire in February 2021. In November 2020, this laboratory lease was extended to June 2021 and was not extended after that date as the Company completed an evaluation its laboratory operations requirements and determined it would discontinue the laboratory activities and outsource its requirements.

The Company does not have any lease contracts that contain: (1) an option to extend that the Company is reasonably certain to exercise, (2) an option to terminate that the Company is reasonably certain to exercise, or (3) an option to extend (or not to terminate) in which exercise of the option is controlled by the lessor. Additionally, the Company does not have any leases with residual value guarantees or material restrictive covenants. Lease liabilities and their corresponding right-of-use assets have been recorded based on the present value of the future lease payments over the expected lease term. One of the Company’s lease agreements contains provisions for escalating rent payments over the term of the lease.

The Company’s leases do not contain readily determinable implicit discount rates, and therefore, the Company was required to use its incremental borrowing rate of 7.8% to discount the future lease payments based on information available at lease commencement. In October 2020, the new discount rate for the office lease extension was estimated at 5.4%. The incremental borrowing rate was estimated by determining the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

For the years ended December 31, 2021, 2020 and 2019, the Company recorded $113, $139, and $140, respectively, in rent expense.

The Company’s operating lease cost as presented in the “Research and Development” and “General and Administrative” captions in the statements of operations was $9, $55 and $55 and $86, $84 and $85 for the years ended December 31, 2021, 2020 and 2019, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $83 and $131 for years ended December 31, 2021 and 2020, respectively. The ROU asset amortization for years ended December 31, 2021, 2020 and 2019 was $88, $129 and $121, respectively, and is reflected in depreciation and amortization in the Company’s statements of cash flows. As of December 31, 2021, the weighted-average remaining lease term was 1.25 years, and the weighted-average discount rate was 5.4%.

The table below presents the lease-related assets and liabilities recorded on the balance sheet as of December 31, 2021:

Assets	Classification
Operating lease right-of-use assets	Operating lease right-of-use assets, net	$	104
Total leased assets		$	104
Liabilities
Operating lease liabilities, current	Accrued liabilities	$	84
Operating lease liabilities, noncurrent	Operating lease liabilities, net of current portion		15
Total operating lease liabilities		$	99

The Company’s future annual lease commitments as of December 31, 2021 are as indicated below:

Schedule of Future Lease Commitments

	Total			2022		2023		Thereafter
Undiscounted lease payments	$	102		$	87	$	15	$	—
Less: Imputed interest		(3	)
Total lease liabilities	$	99

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 – Income Taxes

The provision for income taxes for the Company consists of the following for the years ended December 31, 2021, 2020 and 2019:

Schedule of Provision for Income Taxes

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2021			2020			2019
Current:
Federal	$	—		$	—		$	—
State		—			—			—
Total current expense		—			—			—

Deferred:
Federal		460			6,020			3,961
State		185			2,151			1,415
Change in valuation allowance		(645	)		(8,171	)		(5,376	)
Total deferred expense		—			—			—
Total provision	$	—		$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 are as follows:

Schedule of Deferred Tax Assets

	December 31,			December 31,
	2021			2020
Net operating losses	$	15,871		$	16,250
Stock-based expenses		2,135			1,257
Accruals and other		542			396
Total deferred tax assets		18,548			17,903
Valuation allowance		(18,548	)		(17,903	)
Net deferred tax assets	$	—		$	—

Based on the uncertainty of future taxable income at this time management believes a 100% valuation reserve for the $18,548 and $17,903 deferred tax assets at December 31, 2021 and 2020, respectively, is appropriate.

A reconciliation of the statutory federal tax rate to effective tax rate is shown below:

	Year ended December 31			Year ended December 31,			Year ended December 31,
	2021			2020			2019
Benefit at statutory rate		(21.0	)%		(21.0	)%		(21.0	)%
Permanent items (primarily warrants and stock compensation)		(2.5	)		(0.5	)		(0.6	)
State tax benefit		(9.5	)		(7.7	)		(7.7	)
Federal rate change		—			—			—
Other items		—			—			—
Establishment of valuation allowance		33.0			29.2			29.3
Income tax expense		—	%		—	%		—	%

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 12 – Income Taxes (continued)

The Company has a federal and state NOL carryforward of $55,675 as of December 31, 2021. Under the Tax Act, federal NOLs incurred in taxable years ending after December 31, 2017 in the amount of $50,023 may be carried forward indefinitely, but the deductibility of federal NOLs generated in tax years beginning before December 31, 2017 in the amount of $5,652 will expire in 2037. The state NOL carry forward will begin to expire in 2029.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Employee Savings Plan

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee Savings Plan

Note 13 - Employee Savings Plan

The Company established an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code, effective January 1, 2018. The plan allows participating employees to deposit into tax deferred investment accounts up to 100% of their salary, subject to annual limits. The Company makes certain matching contributions to the plan in amounts up to 4% of the participants’ annual cash compensation, subject to annual limits. For the years ended December 31, 2021, 2020 and 2019, the Company made $154, $117 and $113, respectively, in matching contributions.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 14 — Commitments and Contingencies

Legal

The Company is subject to legal proceedings and claims that may arise in the ordinary course of business. The Company is not aware of any pending or threatened litigation matters at this time that may have a material impact on the operations of the Company.

License and Product Development Agreements

The Company has entered into various agreements in addition to those discussed above which are described below.

The Company acquired the exclusive rights to sell the Cysteine injection product in the United States pursuant to a sales and marketing agreement dated November 17, 2017 with an unaffiliated third party (the “Sales Agreement”). Pursuant to the Sales Agreement, the licensor is responsible for obtaining FDA approval, at its expense, and the Company is responsible for commercializing the product in the United States at its expense. The Company was to pay the third party 50% of the net profit from the sale of the product, however, in February 2020, it executed an amendment to the Sales and Marketing Agreement. Under the revised terms, the Company will be responsible for paragraph IV related litigation and will be entitled to 62.5% of product profit. The initial term is for the first 10 years following the first commercial sale of the product.

On February 8, 2019, the Company entered into an Exclusive Licensing and Supply Agreement (the “ET-202 License Agreement”) with Sintetica SA (“Sintetica”) for marketing rights in the United States to Biorphen® which is used for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia. The product was submitted to the FDA for review and subsequently received FDA approval on October 21, 2019. Pursuant to the terms of the ET-202 License Agreement, the Company is responsible for marketing activities and Sintetica is responsible for development, manufacturing, and the regulatory activities related to approval. The Company paid Sintetica a licensing payment of $2,000 upon execution of the ET-202 License Agreement and $750 upon the commencement of commercial product shipments. Sintetica supplies Biorphen to the Company at its direct costs and the Company retains 5% of net sales as a marketing fee. Sintetica is entitled to receive the first $500 of product profits. All additional profit will be split 50% to the Company and 50% to Sintetica. The ET-202 License Agreement has a ten-year term from the first commercial sale of Biorphen which occurred in November 2019. There was a gross loss for Biorphen for the years ended December 31, 2021 and 2020 due to slower than anticipated sales and a product price reduction through the Company’s wholesale customers.

On February 8, 2019, the Company also entered into an Exclusive Licensing and Supply Agreement (the “ET-203 License Agreement”) with Sintetica for marketing rights in the United States to ephedrine HCl (brand name Rezipres®), an injectable product candidate for use in the hospital setting. Pursuant to the terms of the ET-203 License Agreement, the Company will be responsible for marketing activities and Sintetica will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. The Company paid Sintetica a licensing payment of $1,000 upon execution of the ET-203 License Agreement which was refunded to Eton in early 2020 due to the FDA not accepting the ET-203 file submission by Sintetica. The Rezipres product was successfully resubmitted in late 2020 and the Company paid a $600 milestone fee in July 2021 and will pay $750 upon the commercial sale of the product. Sintetica supplies Rezipres to the Company at its direct costs. The Company will retain 5% of net sales as a marketing fee. Sintetica will be entitled to receive the first $500 of product profits. All additional profit will be split 50% to the Company and 50% to Sintetica. The ET-203 License Agreement has a ten-year term from first commercial sale of product.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 14 — Commitments and Contingencies (continued)

The three oral solution pediatric neurology product candidates discussed below, Topiramate, Zonisamide and Lamotrigine were developed by the Company and its various product candidate development partners and the Company subsequently sold all its rights and interests in these three products to Azurity in 2021. The Company has recognized $17,000 in milestone revenues to date from these three products and may receive up to $25,000 in additional milestone revenues related to FDA product approvals and the future sales levels for the products.

During the years ended December 31, 2021, 2020 and 2019, the Company worked with Tulex Pharmaceuticals, Inc. (“Tulex”) as a third-party contract manufacturer to develop an oral solution for Topiramate (fka ET-101) which targets a neurological condition. The Company subsequently filed the product with the FDA in October 2020 and paid a $1,438 filing fee. In November 2021, the product received approval from the FDA and was launched by Azurity in December 2021. The Company recognized a $5,000 milestone revenue at launch which was reflected in accounts receivable on the Company’s balance sheet at December 31, 2021 and subsequently collected in January 2022.

On January 23, 2019, the Company entered into a Licensing and Supply Agreement (the “Agreement”) with LMW for Zonisamide oral liquid, a development stage product candidate (“ET-104”). Pursuant to the terms of the Agreement, the Company was to be responsible for regulatory and marketing activities. LMW will be responsible for development and manufacturing of ET-104. The Company paid the licensor $350 upon execution of the Agreement and an additional $350 after receiving successful bioequivalence study results, and $325 upon the FDA’s acceptance of the NDA for review and will pay $325 upon FDA approval of the NDA, $650 upon issuance of patent covering ET-104 listed in the FDA’s Orange Book and $500 in the event that product sales in excess of $10,000 were achieved within a calendar year. In addition, the Company was required to pay the licensor 35% of the net profit from product sales. The Agreement was for an initial term of 10 years from the date of the first commercial sale of the product. The Company was to retain sole ownership of the NDA after expiration of the Agreement.

On June 12, 2019, the Company entered into an Exclusive Licensing and Supply Agreement (the “ET-105 License Agreement”) with Aucta Pharmaceuticals, Inc. (“Aucta”) for marketing rights in the United States to Lamotrigine, an oral suspension product candidate for use as an adjunct therapy for partial seizures, primary generalized tonic-clonic seizures, and generalized seizures of Lennox-Gastaut syndrome in patients two years of age and older. Pursuant to the terms of the ET-105 License Agreement, the Company was to be responsible for marketing activities and Aucta will be responsible for development, manufacturing, and regulatory activities related to obtaining regulatory approval. The Company paid Aucta a licensing payment of $2,000 in August 2019 upon receiving an acceptance for review letter from the FDA and will pay $2,450 upon FDA approval and commercial sales of the product candidate and another $1,000 upon issuance of an Orange-book listed patent. If Aucta successfully completes a Lamotrigine product line extension product, Eton will pay $1,500 upon FDA acceptance of the product filing, $1,500 upon FDA approval and commercial sales of the extension product candidate and $450 if the intellectual property for the extension product is transferred to Azurity. Aucta will be entitled to receive milestone payments from the Company of up to $3,000 based on commercial success of the product, including:

	●	$1,000 when net sales exceed $10 million in a calendar year
	●	$2,000 when net sales exceed $20 million in a calendar year

Azurity will assume royalty or profit share obligations owed to development partners as well as additional milestone payments based on sales volume targets.

Eton Pharmaceuticals, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 14 — Commitments and Contingencies (continued)

On March 27, 2020, the Company entered into an Exclusive Licensing and Supply Agreement (the “Alkindi License Agreement”) with Diurnal for marketing Alkindi Sprinkle in the United States. Alkindi Sprinkle’s New Drug Application (NDA) was approved by the FDA on September 29, 2020 as a replacement therapy for pediatric adrenal insufficiency (AI), including congenital adrenal hyperplasia (CAH) in patients from birth to less than 17 years of age.

For the initial licensing milestone fee, the Company paid Diurnal $3,500 in cash and issued 379,474 shares of its common stock to Diurnal which were valued at $1,264 based on the Company’s closing stock price of $3.33 on March 26, 2020 (see Note 6). The total amount of $4,764 was recorded as a component of research and development expense in the Company’s statement of operations for the year ended December 31, 2020. The Company will also pay Diurnal $2,500 if the product obtains orphan drug exclusivity status from the FDA.

On June 15, 2021, the Company acquired U.S. and Canadian rights to Crossject’s ZENEO® hydrocortisone needleless autoinjector, which is under development as a rescue treatment for adrenal crisis. The Company expects to submit the New Drug Application (NDA) to the FDA in 2023 and plans to request orphan drug designation. The Company paid Crossject $500 upon signing and could pay up to $4,500 in development milestones and up to $6,000 in commercial milestones, as well as a 10% royalty on net sales.

On October 28, 2021, the Company acquired the U.S. marketing rights to Carglumic Acid Tablets. The product’s Abbreviated New Drug Application (“ANDA”), which is owned by Novitium Pharma, was approved by the FDA on October 12, 2021. The product is an AB-rated, substitutable generic version of Carbaglu®. The Company paid $3,250 upon signing and will retain 50% of future product profits with the balance being distributed to the licensor and manufacturer.

Indemnification

As permitted under Delaware law and in accordance with the Company’s Amended and Restated Bylaws, the Company is required to indemnify its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its directors and officers. The Company believes the fair value of the indemnification rights and agreements is minimal. Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of December 31, 2021 or 2020.

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	*Basis of Presentation* The Company has prepared the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates	*Use of Estimates* The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, provisions for uncollectible receivables, chargebacks and sales returns, valuation of inventories, useful lives of assets and the impairment of property and equipment, the accrual of research and development expenses and the valuation of common stock, stock options and warrants. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.
Segment Information	*Segment Information* The Company operates the business on the basis of a single reportable segment, which is the business of developing and commercializing prescription drug products. The Company’s chief operating decision-maker is the Chief Executive Officer (“CEO”), who evaluates the Company as a single operating segment.
Cash and Cash Equivalents	*Cash and Cash Equivalents* The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in U.S. financial institutions or invested in short-term U.S. treasury bills. Cash equivalents consist of an interest-bearing checking account and a U.S. treasury bill. From time to time, amounts deposited with its bank exceed federally insured limits. The Company believes the associated credit risk to be minimal.
Accounts Receivable	*Accounts Receivable* Accounts receivable are recorded at the invoiced amount and are non-interest bearing. Accounts receivable are recorded net of allowances for doubtful accounts, cash discounts for prompt payment, distribution fees, chargebacks and returns and allowances. The total for these reserves amounted to $96 and $71 as of December 31, 2021 and 2020, respectively.
Inventories	*Inventories* The Company values its inventories at the lower of cost or net realizable value using the first-in, first-out method of valuation. The Company reviews its inventories for potential excess or obsolete issues on an ongoing basis and will record a write-down if an impairment is identified. Inventories at December 31, 2021 and 2020 consist solely of purchased finished goods. At December 31, 2021, inventories are shown net of a slow-moving reserve for its Biorphen product of $1,414 due to the risk of expiry before this entire stock of inventories is sold. There was an inventory reserve of $1,414 and $623 at December 31, 2021 and 2020, respectively.
Property and Equipment	*Property and Equipment* Property and equipment are stated at cost. Depreciation of property and equipment is computed utilizing the straight-line method based on the following estimated useful lives. Computer hardware and software is depreciated over three years. Equipment, furniture and fixtures is depreciated over five years. Leasehold improvements are amortized over their estimated useful lives or the remaining lease term, whichever is shorter. Construction in progress is capitalized but not depreciated until it is placed into service. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued)
Intangible Assets	*Intangible Assets* The Company capitalizes payments it makes for licensed products when the payment is based on FDA approval for the product and the cost is recoverable based on expected future cash flows from the product. The cost is amortized on a straight-line basis over the estimated useful life of the product commencing on the approval date in accordance with Accounting Standards Codification (“ASC”) 350 — Intangibles - Goodwill and Other. A $750 payment related to the approval of the Company’s Biorphen product in 2019 has been capitalized and that cost is being amortized over five years. A $3,250 payment related to the approval of the Company’s Carglumic Acid product in December 2021 has been capitalized and that cost is being amortized over ten years. The intangible assets, net on the Company’s balance sheet reflected $379 and $175 of accumulated amortization as of December 31, 2021 and 2020, respectively. The Company recorded amortization expense of $204, $150 and $25 for the years ended December 31, 2021, 2020 and 2019, respectively, and will record amortization expense of $475 per year for these intangible assets for 2022 through 2023 and then $450 in 2024 when the Biorphen asset will be fully amortized. For 2025 through 2030, the Company will incur amortization expense of $325 and then $271 in 2031 when the Carglumic Acid asset will be fully amortized.
Impairment of Long-Lived Assets	*Impairment of Long-Lived Assets* Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the Company’s statements of operations for the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairment was recognized during the years ended December 31, 2021, 2020 and 2019.
Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants	*Debt Issuance Costs and Debt Discount and Detachable Debt-Related Warrants* Costs incurred to issue debt are deferred and recorded as a reduction to the debt balance in the accompanying balance sheets. The Company amortizes debt issuance costs over the expected term of the related debt using the effective interest method. Debt discounts relate to the relative fair value of warrants issued in conjunction with the debt and are also recorded as a reduction to the debt balance and accreted over the expected term of the debt to interest expense using the effective interest method. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued)
Leases	*Leases* The Company accounts for leases in accordance with ASC Topic 842 — Leases. The Company reviews all relevant facts and circumstances of a contract to determine if it is a lease whereby the terms of the agreement convey the right to control the direct use and receive substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration. The associated right-of-use assets and lease liabilities are recognized at lease commencement. The Company measures lease liabilities based on the present value of the lease payments over the lease term discounted using the rate it would pay on a loan with the equivalent payments and term for the lease. The Company does not include the impact for lease term options that would extend or terminate the lease unless it is reasonably certain that it will exercise any such options. The Company accounts for the lease components separately from non-lease components for its operating leases. The Company measures right-of-use assets based on the corresponding lease liabilities adjusted for (i) any prepayments made to the lessor at or before the commencement date, (ii) initial direct costs it incurs, and (iii) any incentives under the lease. In addition, the Company evaluates the recoverability of its right-of-use assets for possible impairment in accordance with its long-lived assets policy. Operating leases are reflected on the balance sheets as operating lease right-of-use assets, current accrued liabilities and long-term operating lease liabilities. The Company does not have any finance leases as of December 31, 2021 and 2020. The Company commences recognizing operating lease expense when the lessor makes the underlying asset available for use by the Company and the operating lease expense is recognized on a straight-line basis. Variable lease payments are expensed as incurred. The Company does not recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less; such lease costs are recorded in the statements of operations on a straight-line basis over the lease term.
Patent Costs	*Patent Costs* All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the successful award of a patent and the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.
Concentrations of Credit Risk, Sources of Supply and Significant Customers	*Concentrations of Credit Risk, Sources of Supply and Significant Customers* The Company is subject to credit risk for its cash and cash equivalents which are invested in money market funds and U.S. treasury bills from time to time. The Company maintains its cash and cash equivalent balances with one major commercial bank and the deposits held with the financial institution exceed the amount of insurance provided on such deposits and is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents to the extent recorded on the balance sheets. The Company is dependent on third-party suppliers for its products and product candidates. In particular, the Company relies, and expects to continue to rely, on a small number of suppliers to manufacture key chemicals, approved products and process its product candidates as part of its development programs. These programs could be adversely affected by a significant interruption in the manufacturing process. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) The Company is also subject to credit risk from its accounts receivable related to product sales as it extends credit based on an evaluation of the customer’s financial condition, and collateral is not required. Management monitors its exposure to accounts receivable by periodically evaluating the collectability of the account receivable based on a variety of factors including the length of time the receivables are past due, the financial health of the customer and historical experience. Based upon the review of these factors, the Company recorded no allowance for doubtful accounts at December 31, 2021 or 2020. The accounts receivable balance at December 31, 2021 and 2020 and product sales revenue recognized during the year ended December 31, 2021 and 2020 consist of sales to and amounts due from AmerisourceBergen Corporation, Cardinal Health Services and McKesson Corporation for sales of the Company’s Biorphen product. The December 31, 2021 accounts receivable balance and sales in 2021 also include a $5,000 milestone from Azurity, in accordance with the Eprontia™ (topiramate oral solution) product, amounts due from AnovoRx for sales of the Company’s Alkindi Sprinkle product and its Carglumic Acid product, which launched in December 2021.
Revenue Recognition for Contracts with Customers	*Revenue Recognition for Contracts with Customers* The Company accounts for contracts with its customers in accordance with ASC 606 — Revenue from Contracts with Customers. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses whether these options provide a material right to the customer and, if so, they are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method. Any amounts received prior to revenue recognition will be recorded as deferred revenue. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date will be classified as current portion of deferred revenue in the Company’s balance sheets. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as long-term deferred revenue, net of current portion. Milestone Payments – If a commercial contract arrangement includes development and regulatory milestone payments, the Company will evaluate whether the milestone conditions have been achieved and if it is probable that a significant revenue reversal would not occur before recognizing the associated revenue. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued) Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements. Significant Financing Component – In determining the transaction price, the Company will adjust consideration for the effects of the time value of money if the expected period between payment by the licensees and the transfer of the promised goods or services to the licensees will be more than one year. The Company sells Biorphen in the U.S. to wholesale pharmaceutical distributors, who then sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual shipments of Biorphen represent performance obligations under each purchase order. The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities. The Company has no significant obligations to wholesalers to generate pull-through sales. In addition, the Company sells its Alkindi Sprinkle and Carglumic Acid product to one pharmacy distributor customer which provides order fulfilment and inventory storage/distribution services. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when the wholesalers sell Biorphen at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. In addition, the Company pays fees to wholesalers for their distribution services, inventory reporting and chargeback processing. The Company pays GPOs fees for administrative services and for access to GPO members and concluded the benefits received in exchange for these fees are not distinct from its sales of Biorphen, and accordingly it applies these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Biorphen and the Company’s lengthy return period, there may be a significant period of time between when the product is shipped and when it issues credits on returned product. For its Alkindi Sprinkle and Carglumic Acid products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment. The Company estimates the transaction price when it receives each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler/distributor arising from all of the above factors. The Company has developed estimates for future returns and chargebacks of Biorphen and the impact of the other discounts and fees it pays while Alkindi Sprinkle and Carglumic Acid sales to its distributor are not subject to returns. When estimating these adjustments to the transaction price, the Company reduces it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. The Company recognizes revenue from Biorphen product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay the Company. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, the Company does not believe they have a significant incentive to return the product. The Company stores its Alkindi Sprinkle and Carglumic Acid inventory at its pharmacy distributor customer location and sales are recorded when stock is pulled and shipped to fulfill specific patient orders. Upon recognition of revenue from product sales, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, state Medicaid and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. The Company monitors actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts end up differing from its estimates, it will make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. In addition, the Company anticipates it will receive revenues from product licensing agreements where it has contracted for milestone payments and royalties from products it has developed or for which it has acquired the rights to a product developed by a third party. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued)
Cost of Product Sales	*Cost of Product Sales* Cost of product sales consists of the profit-sharing and royalty fees with the Company’s product licensing and development partners, the purchase costs for finished products from third-party manufacturers and freight and handling/storage costs from the Company’s 3PL logistics service providers. The cost of sales for profit-sharing and royalty fees and costs for purchased finished products and the associated inbound freight expense is recorded when the associated product sale revenue is recognized in accordance with the terms of shipment to customers while outbound freight and handling/storage fees charged by the 3PL service provider are expensed as they are incurred. Cost of sales also reflects any write-downs or reserve adjustments for the Company’s inventories.
Research and Development Expenses	*Research and Development Expenses* Research and development (“R&D”) expenses include both internal R&D activities and external contracted services. Internal R&D activity expenses include salaries, benefits and stock-based compensation and other costs to support the Company’s R&D operations. External contracted services include product development efforts such as certain product licensor milestone payments, clinical trial activities, manufacturing and control-related activities and regulatory costs. R&D expenses are charged to operations as incurred. The Company reviews and accrues R&D expenses based on services performed and relies upon estimates of those costs applicable to the stage of completion of each project. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Upfront payments and milestone payments made for the licensing of technology for products that are not yet approved by the FDA are expensed as R&D in the period in which they are incurred. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and are expensed as the related goods are delivered or the services are performed.
Earnings (Loss) Per Share	*Earnings (Loss) Per Share* Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as Series A Preferred, unvested restricted stock, stock options and warrants that are outstanding during the period. Common stock equivalents are excluded from the computation when their inclusion would be anti-dilutive. No such adjustments were made for 2021, 2020 or 2019 as the Company reported a net loss for the years ended December 31, 2021, 2020 and 2019 and including the effects of common stock equivalents in the diluted earnings per share calculation would have been anti-dilutive (see Note 9). Basic weighted average shares for the year ended December 31, 2021 include 600,000 vested warrants to purchase common shares. As the shares underlying these warrants can be purchased for little to no consideration ($0.01 per share exercise price), they are included in the computation of basic earnings per share.
Stock-Based Compensation	*Stock-Based Compensation* The Company accounts for stock-based compensation under the provisions of ASC — 718 Compensation — Stock Compensation. The guidance under ASC 718 requires companies to estimate the fair value of the stock-based compensation awards on the date of grant and record expense over the related service periods, which are generally the vesting period of the equity awards. The Company estimates the fair value of stock-based option awards using the Black-Scholes-Merton option-pricing model (“BSM”). The BSM requires the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate was determined from the implied yields for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options or warrants. Dividends on common stock are assumed to be zero for the BSM valuation of the stock options. The expected term of stock options granted is based on vesting periods and the contractual life of the options. Expected volatilities are based on comparable companies’ historical volatility along with a limited weighting included for the Company’s own volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current conditions. The Company accounts for forfeitures as they occur. The Company uses the closing common stock price on the date of grant for the fair value of the common stock. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued)
Income Taxes	*Income Taxes* As part of the process of preparing the Company’s financial statements, the Company must estimate the actual current tax liabilities and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the balance sheets. The Company must assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or increase or decrease to this allowance in a period, the impact will be included in income tax expense in the statements of operations. As of December 31, 2021 and 2020, the Company has established a 100% valuation reserve against its deferred tax assets. The Company accounts for income taxes under the provisions of ASC 740 - Income Taxes. As of December 31, 2021 and 2020, there were no unrecognized tax benefits included in the balance sheets that would, if recognized, affect the effective tax rate. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties in its balance sheets at December 31, 2021 or 2020, and has not recognized interest and penalties in the statements of operations for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the Company is subject to taxation in the United States and certain individual states – primarily Illinois and Tennessee. The Company’s tax losses from 2017 through 2021 are subject to examination by the federal and state tax authorities due to the carryforward of unutilized net operating losses (“NOLs”). Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result, no liability for uncertain tax positions was recorded as of December 31, 2021 or 2020. Eton Pharmaceuticals, Inc. NOTES TO FINANCIAL STATEMENTS (in thousands, except share and per share amounts) Note 3 — Summary of Significant Accounting Policies (continued)
Fair Value Measurements	*Fair Value Measurements* We measure certain of our assets and liabilities at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value accounting requires characterization of the inputs used to measure fair value into a three-level fair value hierarchy as follows: *Level 1* — Inputs based on quoted prices in active markets for identical assets or liabilities. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. *Level 2* — Observable inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent from the entity. *Level 3* — Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available. Fair value measurements are classified based on the lowest level of input that is significant to the measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values stated below takes into account the market for the Company’s financials, assets and liabilities, the associated credit risk and other factors as required. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, PPP loan and long-term debt obligation. The carrying amounts of these financial instruments, except for the PPP loan and long-term debt obligation, approximate their fair values due to the short-term maturities of these instruments. Based on borrowing rates currently available to the Company, the carrying value of the PPP loan and long-term debt obligation approximate their respective fair values.
Impact of New Accounting Pronouncements	*Impact of New Accounting Pronouncements* There were no new accounting pronouncements issued by the FASB during the current period that would apply to the Company and have a material impact on its financial position or results of operations.

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consist of the following:

Schedule of Property and Equipment

	December 31, 2021			December 31, 2020
Computer hardware and software	$	157		$	182
Furniture and fixtures		106			143
Equipment		132			994
Leasehold improvements		71			184
Construction in progress		—			—
Property and equipment, gross		466			1,503
Less: accumulated depreciation and amortization		(351	)		(692	)
Property and equipment, net	$	115		$	811

Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Future Payments of Long Term Debt

The table below reflects the future annual payments for the SWK loan principal and interest as of December 31, 2021.

	Amount
2022	$	2,202
2023		1,756
2024		5,300
Total payments		9,258
Less: amount representing interest		(2,258	)
Loan payable, gross		7,000
Less: current portion of long-term debt		(1,418	)
Less: unamortized discount		(320	)
Long-term debt, net of unamortized discount	$	5,262

Common Stock Warrants (Tables)

12 Months Ended

Dec. 31, 2021

Common Stock Warrants

Summary of Warrants Outstanding

Listed below is a summary of warrants outstanding as of December 31, 2021:

Summary of Warrants Outstanding

Description of Warrants	No. of Shares		Exercise Price
Business Advisory Warrants – 2017		600,000	$	0.01
Placement Agent Warrants – 2017 Preferred Stock Offering		471,446	$	3.00
Placement Agent Warrants - IPO		414,000	$	7.50
SWK Warrants – Debt (Tranche #1)		51,239	$	5.86
SWK Warrants – Debt (Tranche #2)		18,141	$	6.62
Total		1,554,826	$	3.18 (Avg)

Summary of Rollforward of The Warrants Outstanding

A rollforward of the warrants outstanding is listed in the table below:

	No. of Shares
Balance as of the beginning of the year		1,690,476
Exercise of Placement Agent Warrants – 2017 Preferred Stock Offering		(135,650	)
Balance as of the end of the year		1,554,826

Share-Based Payment Awards (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

A summary of stock option activity is as follows:

Summary of Stock Option Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding as of January 1, 2021		2,824,500		$	4.05		8.3	$	11,525
Issued		1,017,098			8.31
Exercised		(144,233	)		2.35
Forfeited/Cancelled		(183,646	)		6.63
Options outstanding as of December 31, 2021		3,513,719		$	5.22		7.9	$	2,711
Options exercisable at December 31, 2021		2,096,630		$	4.37		7.3	$	2,257
Options vested and expected to vest at December 31, 2021		3,463,719		$	5.27		7.9	$	2,565

Schedule of Assumptions Used to Calculate Fair Value of Options Granted

The assumptions used to calculate the fair value of options granted during the years ended December 31, 2021, 2020, and 2019 under the BSM were as follows:

	December 31, 2021			December 31, 2020			December 31, 2019
Expected dividends		—	%		—	%		—	%
Expected volatility		70-80	%		95	%		90	%
Risk-free interest rate		0.9-1.4	%		0.4-0.7	%		1.9-2.5	%
Expected term		6.0 years			5.9 years			5.9 years
Weighted average fair value	$	5.64		$	3.06		$	5.54

Summary of Activity for Restricted Stock Awards

A summary of activity for RSAs is as follows:

Restricted Stock Awards	Number of shares
Unvested as of January 1, 2021		7,595
Issued		—
Vested		(7,595	)
Forfeited/Cancelled		—
Unvested as of December 31, 2021		—

Basic and Diluted Net Loss per Common Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Loss Per Common Share

The following table shows the computation of basic and diluted net loss per common share:

	Year ended December 31, 2021			Year ended December 31, 2020			Year ended December 31, 2019

Net loss	$	(1,955	)	$	(27,970	)	$	(18,320	)
Weighted average common shares outstanding (basic and diluted)		25,207,299			21,010,058			17,760,761
Net loss per common share (basic and diluted)	$	(0.08	)	$	(1.33	)	$	(1.03	)

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases

Schedule of Lease-related Assets and Liabilities

The table below presents the lease-related assets and liabilities recorded on the balance sheet as of December 31, 2021:

Assets	Classification
Operating lease right-of-use assets	Operating lease right-of-use assets, net	$	104
Total leased assets		$	104
Liabilities
Operating lease liabilities, current	Accrued liabilities	$	84
Operating lease liabilities, noncurrent	Operating lease liabilities, net of current portion		15
Total operating lease liabilities		$	99

Schedule of Future Lease Commitments

The Company’s future annual lease commitments as of December 31, 2021 are as indicated below:

Schedule of Future Lease Commitments

	Total			2022		2023		Thereafter
Undiscounted lease payments	$	102		$	87	$	15	$	—
Less: Imputed interest		(3	)
Total lease liabilities	$	99

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The provision for income taxes for the Company consists of the following for the years ended December 31, 2021, 2020 and 2019:

Schedule of Provision for Income Taxes

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2021			2020			2019
Current:
Federal	$	—		$	—		$	—
State		—			—			—
Total current expense		—			—			—

Deferred:
Federal		460			6,020			3,961
State		185			2,151			1,415
Change in valuation allowance		(645	)		(8,171	)		(5,376	)
Total deferred expense		—			—			—
Total provision	$	—		$	—		$	—

Schedule of Deferred Tax Assets

The significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 are as follows:

Schedule of Deferred Tax Assets

	December 31,			December 31,
	2021			2020
Net operating losses	$	15,871		$	16,250
Stock-based expenses		2,135			1,257
Accruals and other		542			396
Total deferred tax assets		18,548			17,903
Valuation allowance		(18,548	)		(17,903	)
Net deferred tax assets	$	—		$	—

Schedule of Reconciliation of Statutory Federal Tax Rate

A reconciliation of the statutory federal tax rate to effective tax rate is shown below:

	Year ended December 31			Year ended December 31,			Year ended December 31,
	2021			2020			2019
Benefit at statutory rate		(21.0	)%		(21.0	)%		(21.0	)%
Permanent items (primarily warrants and stock compensation)		(2.5	)		(0.5	)		(0.6	)
State tax benefit		(9.5	)		(7.7	)		(7.7	)
Federal rate change		—			—			—
Other items		—			—			—
Establishment of valuation allowance		33.0			29.2			29.3
Income tax expense		—	%		—	%		—	%

Company Overview (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended							12 Months Ended
	Oct. 31, 2020	Aug. 31, 2020	Apr. 30, 2020	Mar. 31, 2020	Nov. 30, 2019	Nov. 30, 2018	Jun. 30, 2017	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Subsidiary, Sale of Stock [Line Items]
Start-up capital							$ 20,055
Proceeds from loan offering		$ 1,965			$ 4,750				$ 1,965	$ 4,750
Proceeds from sale of shares of common stock			$ 7,756	$ 7,756					$ 28,782
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
Net cash proceeds from initial public offering	$ 21,026					$ 21,960
Common stock share price per share	$ 7.00

Liquidity Considerations (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Subsequent Event [Line Items]
Retained Earnings (Accumulated Deficit)		$ 94,113	$ 92,158
Net Cash Provided by (Used in) Operating Activities		4,721	22,346	$ 18,026
Cash and Cash Equivalents, at Carrying Value		$ 14,406	$ 21,295
Subsequent Event [Member]
Subsequent Event [Line Items]
Milestone payment received	$ 5,000

- Definition

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

Summary of Significant Accounting Policies (Details Narrative)	12 Months Ended
	Dec. 31, 2021 USD ($) Segment $ / shares shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Property, Plant and Equipment [Line Items]
Number of reportable segments \| Segment	1
Accounts receivable reserves	$ 96,000	$ 71,000
Inventory Write-down	1,414,000
Inventory Valuation Reserves	1,414,000	623,000
Payments to Acquire Intangible Assets	$ 3,250,000		$ 750,000
[custom:ProductLicensingRightsAmortizedDescription]	cost is being amortized over five years
[custom:PaymentRelatedToCapitalized]	$ 3,250,000
Finite-Lived Intangible Assets, Accumulated Amortization	379,000	175,000
Amortization of Intangible Assets	204,000	150,000	25,000
Impairment of long-lived assets	0	0	$ 0
Finance lease	0	$ 0
Accounts Receivable, Sale	$ 5,000,000
Percentage for valuation reserve against deferred tax assets	100.00%	100.00%
Vested Warrant [Member]
Property, Plant and Equipment [Line Items]
Weighted average number of shares outstanding, basic \| shares	600,000
Earnings Per Share, Basic \| $ / shares	$ 0.01
Biorphen [Member] \| 2022 Through 2023 [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Assets, Net	$ 475
Biorphen [Member] \| 2024 [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Assets, Net	450,000
Carglumic Acid [Member] \| 2025 through 2030 [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Assets, Net	325,000
Carglumic Acid [Member] \| 2031 [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Assets, Net	$ 271,000
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	3 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment	5 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives for property and equipment, description	estimated useful lives or the remaining lease term

Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Computer hardware and software	$ 157	$ 182
Furniture and fixtures	106	143
Equipment	132	994
Leasehold improvements	71	184
Construction in progress
Property and equipment, gross	466	1,503
Less: accumulated depreciation and amortization	(351)	(692)
Property and equipment, net	$ 115	$ 811

Property and Equipment (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 155	$ 347	$ 283
Net book value	$ 519

Schedule of Future Payments of Long Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
2022	$ 2,202
2023	1,756
2024	5,300
Total payments	9,258
Less: amount representing interest	(2,258)
Loan payable, gross	7,000
Less: current portion of long-term debt	(1,418)
Less: unamortized discount	(320)
Long-term debt, net of unamortized discount	$ 5,262	$ 6,532

Debt (Details Narrative) $ / shares in Units, $ in Thousands						1 Months Ended			12 Months Ended
	May 20, 2021 USD ($)	Aug. 11, 2020 USD ($) $ / shares	Jul. 21, 2020 USD ($)	May 04, 2020 USD ($)	Nov. 13, 2019 USD ($)	Jul. 31, 2021 USD ($)	Aug. 31, 2020 USD ($) shares	Nov. 30, 2019 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)	Sep. 30, 2021 shares	Aug. 31, 2021 $ / shares
Debt Instrument [Line Items]
Borrowing amount		$ 2,000			$ 3,000
Warrants issued to purchase common stock \| shares									1,554,826	1,690,476
Warrants exercise price \| $ / shares									$ 3.18
Interest expenses									$ 1,042	$ 884	$ 98
Debt discount amortization									148	121	16
Accrued interest									134	48
Proceeds from loan										511
Gain on debt extinguishment									365
PPP Loan [Member]
Debt Instrument [Line Items]
Interest expenses	$ 4
Proceeds from loan				$ 361
Gain on debt extinguishment									$ 365
EIDL Loan [Member]
Debt Instrument [Line Items]
Interest expenses						$ 6
Proceeds from loan			$ 150
Warrant [Member]
Debt Instrument [Line Items]
Borrowing amount							$ 2,000
Warrants issued to purchase common stock \| shares							18,141		51,239			51,239
Warrants exercise price \| $ / shares									$ 5.86				$ 6.62
Warrants, fair value		$ 94							$ 226
Warrants expiration term									7 years
Warrant [Member] \| Measurement Input, Exercise Price [Member]
Debt Instrument [Line Items]
Warrants exercise price \| $ / shares		$ 6.85							$ 5.75
Warrant [Member] \| Measurement Input, Option Volatility [Member]
Debt Instrument [Line Items]
Warrant measurement input		95							95
Warrant [Member] \| Measurement Input, Expected Dividend Rate [Member]
Debt Instrument [Line Items]
Warrant measurement input		0							0
Warrant [Member] \| Measurement Input, Risk Free Interest Rate [Member]
Debt Instrument [Line Items]
Warrant measurement input		0.4							1.8
Warrant [Member] \| Measurement Input, Expected Term [Member]
Debt Instrument [Line Items]
Warrants expiration term		7 years
SWK Credit Agreement [Member]
Debt Instrument [Line Items]
Borrowing amount								$ 5,000
Proceeds amount					$ 5,000
Debt Instrument, Interest Rate, Stated Percentage					5.00%
Debt Instrument, Description									The Company is required to maintain a minimum cash balance of $3,000, only pay interest on the debt until February 2022 and then pay 5.5% of the loan principal balance commencing on February 15, 2022 and then every three months thereafter until November 13, 2024 at which time the remaining principal balance is due. Borrowings under the SWK Credit Agreement are secured by the Company’s assets. The SWK Credit Agreement contains customary default provisions and covenants which include limits on additional indebtedness. In March 2020, SWK provided a waiver for the Company to obtain loans with the Small Business Association. In February 2021, the Company notified SWK that it will not require additional borrowing capacity under the SWK Credit Agreement and terminated the additional borrowing capacity with SWK.
Minimum cash balance					$ 3,000
SWK Credit Agreement [Member] \| Unused lines of Credit [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					2.00%
SWK Credit Agreement [Member] \| London Interbank Offered Rate (LIBOR) Swap Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					10.00%
SWK Credit Agreement [Member] \| Stated LIBOR Floor Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					2.00%
SWK Credit Agreement [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Borrowing amount					$ 10,000

Common Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended					12 Months Ended
	Apr. 30, 2021	Oct. 31, 2020	Apr. 30, 2020	Mar. 31, 2020	Nov. 30, 2018	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Subsidiary, Sale of Stock [Line Items]
Common stock, shares authorized						50,000,000	50,000,000
Common stock, par value						$ 0.001	$ 0.001
Number of common stock shares issued				379,474
Value of common stock shares issued				$ 1,264			$ 28,782
Warrant [Member]
Subsidiary, Sale of Stock [Line Items]
Number of stock issued for exercise of stock warrants						135,650
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Number of common stock shares issued						94,808	5,820,000
Value of common stock shares issued							$ 6
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period						144,233	194,878	167,622
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture							15,190
Number of stock issued for exercise of stock warrants						94,808
Employee Stock Purchase Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period						49,155	25,780
RSA To New Employee [Member]
Subsidiary, Sale of Stock [Line Items]
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture			15,190
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent	100.00%		25.00%
Board of Directors [Member] \| Restricted Stock Units (RSUs) [Member]
Subsidiary, Sale of Stock [Line Items]
Number of common stock shares issued	25,000
2018 Equity Incentive Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period						144,233	194,878
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
Number of common stock shares issued		3,220,000
Common stock share price per share		$ 7.00
Net cash proceeds from initial public offering		$ 21,026			$ 21,960
Securities Purchase Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Sale of stock, number of shares issued in transaction			2,600,000	2,600,000
Sale of stock, price per share			$ 3.00	$ 3.00
Proceeds from sale of stock, consideration received on transaction			$ 7,756	$ 7,756

Summary of Warrants Outstanding (Details) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
No. of Shares	1,554,826	1,690,476
Exercise Price	$ 3.18
Business Advisory Warrants – 2017 [Member]
No. of Shares	600,000
Exercise Price	$ 0.01
Placement Agent Warrants - 2017 Preferred Stock Offering [Member]
No. of Shares	471,446
Exercise Price	$ 3.00
Placement Agent Warrants - IPO [Member]
No. of Shares	414,000
Exercise Price	$ 7.50
SWK Warrants – Debt (Tranche #1) [Member]
No. of Shares	51,239
Exercise Price	$ 5.86
SWK Warrants – Debt (Tranche #2) [Member]
No. of Shares	18,141
Exercise Price	$ 6.62

Summary of Rollforward of The Warrants Outstanding (Details)	12 Months Ended
	Dec. 31, 2021 shares
Common Stock Warrants
Balance as of the beginning of the year	1,690,476
Exercise of Placement Agent Warrants - 2017 Preferred Stock Offering	(135,650)
Balance as of the end of the year	1,554,826

Common Stock Warrants (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
Common Stock Warrants (Details Narrative) - USD ($)	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Exercise of Placement Agent Warrant		135,650
Common stock issued	379,474
Warrant exercised		$ 806,000	$ 0
Common Stock [Member]
Common stock issued		94,808	5,820,000

Summary of Stock Option Activity (Details) - Equity Option [Member] $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Offsetting Assets [Line Items]
Shares, Options Outstanding, Beginning Balance \| shares	2,824,500
Weighted Average Exercise Price, Options Outstanding, Beginning Balance \| $ / shares	$ 4.05
Weighted Average Remaining Contractual Term, Options Outstanding, Beginning Balance	8 years 3 months 18 days
Aggregate Intrinsic Value, Options Outstanding, Beginning Balance \| $	$ 11,525
Shares, Issued \| shares	1,017,098
Weighted Average Exercise Price, Issued \| $ / shares	$ 8.31
Shares, Exercised \| shares	(144,233)
Weighted Average Exercise Price, Exercised \| $ / shares	$ 2.35
Shares, Forfeited/Cancelled \| shares	(183,646)
Weighted Average Exercise Price, Forfeited/Cancelled \| $ / shares	$ 6.63
Shares, Options Outstanding, Ending Balance \| shares	3,513,719
Weighted Average Exercise Price, Options Outstanding, Ending Balance \| $ / shares	$ 5.22
Weighted Average Remaining Contractual Term, Options Outstanding, Ending Balance	7 years 10 months 24 days
Aggregate Intrinsic Value, Options Outstanding, Ending Balance \| $	$ 2,711
Shares, Options Exercisable, Ending Balance \| shares	2,096,630
Weighted Average Exercise Price, Options Exercisable, Ending Balance \| $ / shares	$ 4.37
Weighted Average Remaining Contractual Term, Options Exercisable, Ending Balance	7 years 3 months 18 days
Aggregate Intrinsic Value, Options Exercisable, Ending Balance \| $	$ 2,257
Shares, Options Vested and Expected to Vest, Ending Balance \| shares	3,463,719
Weighted Average Exercise Price, Options Vested and Expected to Vest, Ending Balance \| $ / shares	$ 5.27
Weighted Average Remaining Contractual Term, Options Vested and Expected to Vest, Ending Balance	7 years 10 months 24 days
Aggregate Intrinsic Value, Options Vested and Expected to Vest, Ending Balance \| $	$ 2,565

Schedule of Assumptions Used to Calculate Fair Value of Options Granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Expected dividends
Expected volatility, minimum	70.00%
Expected volatility, maximum	80.00%
Expected volatility		95.00%	90.00%
Risk-free interest rate, minimum	0.90%	0.40%	1.90%
Risk-free interest rate, maximum	1.40%	0.70%	2.50%
Expected term	6 years	5 years 10 months 24 days	5 years 10 months 24 days
Weighted average fair value	$ 5.64	$ 3.06	$ 5.54

Summary of Activity for Restricted Stock Awards (Details) - RSAs [Member]	12 Months Ended
	Dec. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Unvested, Outstanding, Beginning Balance	7,595
Number of Shares, Issued
Number of Shares, Vested	(7,595)
Number of Shares, Forfeited/Cancelled
Number of Shares, Unvested, Outstanding, Ending Balance

Share-Based Payment Awards (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		12 Months Ended
	Apr. 30, 2021	Apr. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jan. 02, 2021	Jan. 02, 2020	Jan. 02, 2019	Dec. 31, 2018	May 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares outstanding			24,626,004	24,312,808
Stock-based compensation expense			$ 3,381	$ 2,576	$ 1,888
Proceeds from stock option exercised			$ 541	$ 367	$ 453
Expected dividends
Employees contribution amount			$ 154	$ 117	$ 113
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			2,838	2,295	1,574
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			$ 543	$ 281	$ 314
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation, shares				15,190
Stock option exercises, shares			144,233	194,878	167,622
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option intrinsic value			$ 682
Stock option exercises, shares			144,233
Proceeds from stock option exercised			$ 339
Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options expiration period			10 years
Restricted Stock Awards (RSAs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value, restricted stock			$ 0	$ 3.95	$ 0
Fair value of restricted stock, vested			$ 30	$ 30	$ 66
Non Vested Stock Option Awards And Restricted Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs			$ 6,025
RSA To New Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation, shares		15,190
Restricted stock vested percentage	100.00%	25.00%
Product Consultant [Member] \| Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options expiration period			5 years
Number of stock options issued to purchase common stock			50,000
2017 Equity Incentive Plan [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares authorized										5,000,000
2018 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement, shares available for future issuance			537,306
Share reserve increased						972,512	715,099	704,317
Common stock, shares outstanding				24,312,808	17,877,486				17,607,928
Stock option exercises, shares			144,233	194,878
2018 Equity Incentive Plan [Member] \| January 1, 2019 and Through January 1, 2028 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage for total number of shares outstanding			4.00%
2018 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement, shares available for future issuance									150,000
Stock-based compensation expense			$ 73	$ 71	$ 112
Share based compensation for initial shares reserve, description			The Company’s ESPP provides for an initial reserve of 150,000 shares and this reserve is automatically increased on January 1 of each year by the lesser of 1% of the outstanding common shares at December 31 of the preceding year or 150,000 shares, subject to reduction at the discretion of the Company’s board of directors
Description for deductions to purchase stock at price per share			The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the initial offering period, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration ending on or around June 10 and December 10 each year, subject to a restart feature if the Company’s stock price drops at the end of a six-month period within the twelve-month offering period
Weighted average grant date fair value issued			$ 2.50	$ 2.32	$ 2.56
Employees contribution amount			$ 205	$ 115
Accrued liabilities for remaining employee contributions			$ 22	$ 18

Computation of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Net loss	$ (1,955)	$ (27,970)	$ (18,320)
Weighted average common shares outstanding (basic and diluted)	25,207,299	21,010,058	17,760,761
Net loss per common share (basic and diluted)	$ (0.08)	$ (1.33)	$ (1.03)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=123570139&loc=d3e3602-108585

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 17: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=125511455&loc=SL5780133-109256

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124509347&loc=SL7669619-108580

Reference 25: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=124509347&loc=SL7669625-108580

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

+ Details

Basic and Diluted Net Loss per Common Share (Details Narrative) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from calculation of diluted net loss per share	4,286,687	3,371,489	3,590,465

Related Party Transactions (Details Narrative) - USD ($)					1 Months Ended		12 Months Ended
	Feb. 18, 2019	Jan. 23, 2019	Nov. 17, 2017	Aug. 11, 2017	May 31, 2021	Apr. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 30, 2021
Related Party Transaction [Line Items]
Common Stock, Shares, Issued							24,626,004	24,312,808
Common Stock, Par or Stated Value Per Share							$ 0.001	$ 0.001
Proceeds from Sale of Machinery and Equipment					$ 700,000		$ 700,000
Gain on sale of lab equipment					$ 181,000
Payment of research and development expense							6,235,000	$ 14,104,000	$ 11,555,000
Credit agreement term		10 years	10 years
Amended and Restated Agreement [Member]
Related Party Transaction [Line Items]
Sale of product expense	$ 2,000,000						1,735,000
One Milestone [Member] \| Amended and Restated Agreement [Member]
Related Party Transaction [Line Items]
Related party transaction	250,000
Two Milestone [Member] \| Amended and Restated Agreement [Member]
Related Party Transaction [Line Items]
Related party transaction	$ 500,000
Harrow Health Inc [Member]
Related Party Transaction [Line Items]
Common Stock, Shares, Issued						1,518,000				3,500,000
Common Stock, Par or Stated Value Per Share										$ 0.001
Shares owned							$ 1,982,000
Ownership percentage						8.00%
Harrow Health Inc [Member] \| Chief Executive Officer [Member] \| Restricted Stock [Member]
Related Party Transaction [Line Items]
Number of restricted common stock issued for services						25,000
Eyemax [Member]
Related Party Transaction [Line Items]
Related party transaction				$ 250,000
Payment of research and development expense				250,000
Sale of product expense				$ 500,000
Percentage of royalty fee				10.00%
Related party transaction, description				The Eyemax Agreement was for an initial term of 10 years from the date of the Eyemax Agreement, subject to successive two-year renewals unless the Company elected to terminate the Eyemax Agreement
Credit agreement term				10 years

Schedule of Lease-related Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Oct. 31, 2020
Total leased assets	$ 104	$ 192	$ 195
Operating lease liabilities, noncurrent	15	$ 99
Operating Lease Right-of-use Assets [Member]
Total leased assets	104
Accrued Liabilities [Member]
Operating lease liabilities, current	84
Operating Lease Liabilities Net of Current [Member]
Operating lease liabilities, noncurrent	15
Operating Lease Liability [Member]
Total operating lease liabilities	$ 99		$ 195

Schedule of Future Lease Commitments (Details) - Operating Lease Liability [Member] - USD ($) $ in Thousands	Dec. 31, 2021	Oct. 31, 2020
Undiscounted lease payments	$ 102
2022	87
2023	15
Thereafter
Less: Imputed interest	(3)
Total lease liabilities	$ 99	$ 195

Leases (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
Leases (Details Narrative) - USD ($) $ in Thousands	Oct. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Lease renewed description	In October 2020, the Company renewed its office lease for a two-year period through March 31, 2023
Rights to use of assets	$ 195	$ 104	$ 192
Incremental borrowing rate		7.80%
Estimated discount rate percentage	5.40%
Lease rent expense		$ 113	139	$ 140
Operating Lease, Payments		83	131
Operating Lease, Right-of-Use Asset, Amortization Expense		$ 88	129	121
Operating Lease, Weighted Average Remaining Lease Term		1 year 3 months
Operating Lease, Weighted Average Discount Rate, Percent		5.40%
Research and Development Expense [Member]
Operating Lease, Cost		$ 9	55	55
General and Administrative Expense [Member]
Operating Lease, Cost		86	$ 84	$ 85
Operating Lease Liability [Member]
Operating lease liabilities	$ 195	$ 99

Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Federal
State
Total current expense
Federal	460	6,020	3,961
State	185	2,151	1,415
Change in valuation allowance	(645)	(8,171)	(5,376)
Total deferred expense
Total provision

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Net operating losses	$ 15,871	$ 16,250
Stock-based expenses	2,135	1,257
Accruals and other	542	396
Total deferred tax assets	18,548	17,903
Valuation allowance	(18,548)	(17,903)
Net deferred tax assets

Schedule of Reconciliation of Statutory Federal Tax Rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Benefit at statutory rate	(21.00%)	(21.00%)	(21.00%)
Permanent items (primarily warrants and stock compensation)	(2.50%)	(0.50%)	(0.60%)
State tax benefit	(9.50%)	(7.70%)	(7.70%)
Federal rate change
Other items
Establishment of valuation allowance	33.00%	29.20%	29.30%
Income tax expense

Income Taxes (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2017
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
[custom:PercentageForValuationReserveAgainstDeferredTaxAssets]	100.00%	100.00%
Deferred Tax Assets, Gross	$ 18,548	$ 17,903
Operating Loss Carryforwards	$ 55,675		$ 5,652
Net operating loss carryforward expiration	expire in 2029.
Minimum [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Equity ownership percentage	50.00%
After December 31, 2017 [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Operating Loss Carryforwards	$ 50,023

Employee Savings Plan (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Percentage for tax deferred investment	100.00%
Percentage for matching contribution	4.00%
Employee saving plan for matching contribution	$ 154	$ 117	$ 113

Commitments and Contingencies (Details Narrative) - USD ($)								1 Months Ended			12 Months Ended
	Oct. 28, 2021	Jun. 15, 2021	Mar. 26, 2020	Jun. 12, 2019	Feb. 08, 2019	Jan. 23, 2019	Nov. 17, 2017	Jul. 31, 2021	Oct. 31, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Product Liability Contingency [Line Items]
Percentage of net profits payments	50.00%						50.00%
Litigation related product profit, percentage							62.50%
Credit agreement term						10 years	10 years
Revenue recognized											$ 17,000,000
Additional milestone revenues											25,000,000
Payment of filing fee									$ 1,438,000
Milestone payment amount											5,000,000
Payments for development											6,235,000	$ 14,104,000	$ 11,555,000
Proceeds from sales of common stock, net of offering costs, shares										379,474
Stock Issued During Period, Value, New Issues										$ 1,264,000		28,782,000
Payment for obtaining product orphan drug											2,500,000
Payments for licensing rights	$ 3,250
Exclusive License and Supply Agreement (ET-202 ) [Member]
Product Liability Contingency [Line Items]
Payment of milestone fee								$ 600,000
Exclusive License and Supply Agreement (ET-202 ) [Member] \| Upon FDA Approval [Member]
Product Liability Contingency [Line Items]
Payment of licensing					$ 750,000						$ 750,000
Exclusive License and Supply Agreement (ET-202 ) [Member] \| Sintetica [Member]
Product Liability Contingency [Line Items]
Payment of licensing					$ 2,000,000
Percentage of net sales as marketing fees					5.00%
Proceeds from licensing					$ 500,000
Percentage for additional profit					50.00%
Exclusive License and Supply Agreement (ET-203) [Member]
Product Liability Contingency [Line Items]
Percentage for additional profit					50.00%
Exclusive License and Supply Agreement (ET-203) [Member] \| Sintetica [Member]
Product Liability Contingency [Line Items]
Payment of licensing					$ 1,000,000
Percentage of net sales as marketing fees					5.00%
Proceeds from licensing					$ 500,000
Percentage for additional profit					50.00%
License and Supply Agreement (ET-203) [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Credit agreement term					10 years
Licensing and Supply Agreement [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Percentage of net profits payments						35.00%
Payments for development						$ 350,000
Licensing and Supply Agreement [Member] \| Upon FDA Approval [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						325,000
Licensing and Supply Agreement [Member] \| Upon Successful Bioequivalence Study [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						350,000
Licensing and Supply Agreement [Member] \| Upon FDA Acceptance [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						325,000
Licensing and Supply Agreement [Member] \| Upon Issuance of Patent Covering [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						650,000
Licensing and Supply Agreement [Member] \| Product Sales [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						500,000
Licensing and Supply Agreement [Member] \| Calendar Year [Member] \| Licensor [Member]
Product Liability Contingency [Line Items]
Payments for development						$ 10,000,000
Exclusive License and Supply Agreement (ET-105 ) [Member]
Product Liability Contingency [Line Items]
Payment of licensing				$ 2,000,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Maximum [Member]
Product Liability Contingency [Line Items]
Milestone payment amount				3,000,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Intellectual Property [Member]
Product Liability Contingency [Line Items]
Payment of licensing				450,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Upon FDA Approval [Member]
Product Liability Contingency [Line Items]
Payment of licensing				2,450,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Upon Issuance of Orange-book Listed Patent [Member]
Product Liability Contingency [Line Items]
Payment of licensing				1,000,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Upon FDA Acceptance of Product Filing [Member]
Product Liability Contingency [Line Items]
Payment of licensing				1,500,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Upon FDA Approval and Commercial Sales [Member]
Product Liability Contingency [Line Items]
Payment of licensing				$ 1,500,000
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Sales Exceed $10 Million [Member]
Product Liability Contingency [Line Items]
Milestone payment description				1,000 when net sales exceed $10 million in a calendar year
Exclusive License and Supply Agreement (ET-105 ) [Member] \| Sales Exceed $20 Million [Member]
Product Liability Contingency [Line Items]
Milestone payment description				2,000 when net sales exceed $20 million in a calendar year
Exclusive License and Supply Agreement [Member]
Product Liability Contingency [Line Items]
Cash paid for licensing milestone fee			$ 3,500,000
Proceeds from sales of common stock, net of offering costs, shares			379,474
Stock Issued During Period, Value, New Issues			$ 1,264,000
Shares Issued, Price Per Share			$ 3.33
Aggregate value of licensing milestone amount included in research and development expense												$ 4,764,000
Distribution and Promotion License Agreement [Member]
Product Liability Contingency [Line Items]
Payments for development		$ 500,000
Sale on royalty		10.00%
Distribution and Promotion License Agreement [Member] \| Maximum [Member]
Product Liability Contingency [Line Items]
Cash paid for licensing milestone fee		$ 6,000,000
Distribution and Promotion License Agreement [Member] \| Upon FDA Acceptance of Product Filing [Member]
Product Liability Contingency [Line Items]
Payments for development		$ 4,500,000